Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Newport Corporation (No. 2) Bill,

As amended, considered; to be read the Third time.

Nottingham Corporation Bill (Certified Bill),

As amended, considered; read the Third time (pursuant to the Order of the House of 11th December), and passed.

Liverpool Corporation (No. 2) Bill (by Order),

Third Reading deferred till To-morrow.

Cardiff Corporation Bill (by Order),

Consideration, as amended, deferred till Wednesday, 30th April, at half-past Seven of the clock.

Sea Fisheries Provisional Order Bill, Read the Third time, and passed.

Ministry of Health Provisional Orders (Fylde Water Board, Oldham and Rochdale) Bill,

Read a Second time, and committed.

GREAT WESTERN RAILWAY (DOCKS) BILL.

"for conferring further powers upon the Great Western Railway Company in respect of their docks at Swansea and Port Talbot, respectively; and for other purposes," presented, and read the First time; and ordered to be read a Second time.

MINISTRY OF HEALTH PROVISIONAL ORDERS(CHIPPENHAM AND GRIMSBY) BILL.

"to confirm certain Provisional Orders of the Minister of Health relating to Chippenham and Grimsby," presented by Mr. Greenwood; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 172.]

EDUCATION.

Mr. PALIN: I beg leave to present a Petition from 1870 parishioners of the
Catholic Church, St. Michaels, Westmoreland Road, Newcastle-on-Tyne, who are voters in the Central and Western Divisions of the City of Newcastle, praying for equal financial assistance for all schools recognised as efficient by the Board of Education.

Mr. SPEAKER: It sounds as if it were a petition for public money. If that be so, it is not in order.

Oral Answers to Questions — PASSPORTS.

Mr. DAY: 1.
asked the Secretary of State for Foreign Affairs the number of passports issued by the British passport offices in London and Liverpool for the 12 months ended to the last convenient date and the total amount received for fees during this period?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Dalton): I would refer my hon. Friend to the written reply given to a similar question put by the hon. Member for Grimsby (Mr. Womersley) on Monday last in which full particulars were given of services rendered and fees received by the passport offices in London and Liverpool during the year ending the 31st December, 1929.

Oral Answers to Questions — RUSSIA.

BRITISH CLAIMS.

Mr. GILL: 3.
asked the Secretary of State for Foreign Affairs if in the claims made by this country against the Russian Government there is included the sum of £937 9s. 5d. paid to the Indian Government as the cost of their giving asylum to an insane Russian refugee from Iraq?

Mr. DALTON: The claim to which my hon. Friend refers has been noted for presentation to the Soviet Government when the appropriate time arrives. It is a common practice for His Majesty's Government to present claims of this kind, in respect of assistance rendered from public funds to distressed foreigners, to the foreign Governments concerned.

Mr. GILL: Is the Under-Secretary aware that this man had been left in Iraq after the War, and after he had fought on our side?

Mr. DALTON: I was not aware of that fact, but I have no doubt that this and other considerations will be taken into account when these claims are dealt with in the course of the negotiations.

Mr. CHARLES WILLIAMS: In the meanwhile, who is paying the interest on this money?

Mr. DALTON: I am afraid that I must have notice of that question.

Mr. GILL: 4.
asked the Secretary of State for Foreign Affairs the total amount of the claims made by this country against the Russian Government?

Mr. DALTON: As my hon. Friend will be aware from White Paper No. 112, the capital sum owing on the 31st March, 1930, to His Majesty's Government in respect of the debt of the former Imperial Russian Government amounted, with accrued interest, to £962,615,000. In addition, there are some 50,000 private claims of all categories by British claimants registered at, the Board of Trade. Claims expressed in sterling amount to £255,000,000; those expressed in Russian currency to 1,000,000,000 roubles. I would point out, however, that the Board of Trade have no means of verifying these claims and that in many cases private individuals are themselves unable to give precise particulars owing to their inability to recover the documents on which their claims are based.

Major the Marquess of TITCH-FIELD: May I ask whether the ambassadorial plate received by the Bolshevist Government is in this claim?

Mr. DALTON: I must have notice of that question.

Mr. WILLIAMS: Does the hon. Gentleman not know the White Paper from which he quotes?

RELIGIOUS SITUATION.

Mr. SMITHERS: 5.
asked the Secretary of State for Foreign Affairs whether he will call a conference of representatives of the Powers of Europe to consider what
joint action can be taken to counteract the anti-religious activities of the Bolshevist Government?

Mr. DALTON: No, Sir. As my right hon. Friend informed the hon. and gallant Member for Gainsborough (Captain Crookshank) on the 12th of March, in reply to a practically identical question, he is not prepared to take any initiative on the lines suggested.

Mr. SMITHERS: Is the policy of the Government in accordance with British traditions, which is to uphold the oppressed, and will the Under-Secretary not see what steps can be taken—[HON. MEMBERS: "Order!"] On a point of Order. Is it in order for the hon. Gentleman to point to the door. Am I, Mr. Speaker, to take my orders from the hon. Gentleman or from you?

Mr. SPEAKER: The hon. Member had better take his orders from me.

PERMANENT COUFT OF INTERNATIONAL JUSTICE.

Mrs. HAMILTON: 6.
asked the Secretary of State for Foreign Affairs the present position as regards the ratification by the United States of America of the Protocol of the Permanent Court of International Justice?

Mr. DALTON: I have no information beyond the fact that this question has not yet come before the United States Senate.

CHINA.

Sir KINGSLEY WOOD: 7.
asked the Secretary of State for Foreign Affairs the present position of affairs in China; and whether any action has been taken in relation to the Customs revenue at Tientsin?

Mr. DALTON: I have little to add to the reply which was given on, Monday last to the hon. Member for Devizes (Mr. Hurd). I have received no report of further developments in the north; in the south the Government forces claim successes in the north river districts of Kwangtung, while in the west it appears that rebel forces have recaptured Lungchow. I have not received official confirmation of the report which appeared in the Press on Monday last of the
seizure of part of the Tientsin Customs revenue by the anti-Government coalition, to which, I presume, the right hon. Gentleman refers.

Sir K. WOOD: Has the hon. Gentleman had any intelligence as to the safety of the British missionaries?

Mr. DALTON: Perhaps the right hon. Gentleman will put down a further question on that point.

Sir K. WOOD: Is the Under-Secretary aware that I have already put down several questions on this matter and that the Secretary of State has already made inquiries. I want to know whether any further intelligence has been received as to the safety of these missionaries?

Mr. DALTON: On that particular point, I have not had any further report since my right hon. Friend answered the question.

Earl WINTERTON: As there is great anxiety in the minds of the relatives of these people who are prisoners in the hands of the Chinese, will the Under-Secretary consider this matter of some importance and ascertain whether they are safe—[Interruption]—and, if not, what steps can be taken to ensure their safety: or does he share the apparent derision of his supporters behind him?

Mr. DALTON: I shall not answer the irrelevant passage at the end of the Noble Lord's supplementary question. The answer to the first part is that, as my right hon. Friend has more than once stated, our representative in China is keeping in close touch with what is happening and has made urgent representations to the Chinese authorities on this and similar matters.

Mr. THURTLE: Is my hon. Friend aware that the derision manifested on these benches was directed against the hypocrisy of hon. Members opposite?

SLAVE TRADE (RED SEA).

Mr. DAY: 9.
asked the First Lord of the Admiralty whether he has received any reports from the officers commanding the two sloops which were detailed for duty in the Red Sea, for the purpose of preventing slave trading in this region; and can he state from his reports whether this traffic still exists from the
African coast to Arabia, and if any dhows carrying slaves have been captured during the 12 months ended to the last convenient date?

The FIRST LORD of the ADMIRALTY (Mr. A. V. Alexander): The reports received during the present year from the officers commanding the Red Sea sloops state that while the wholesale traffic in cargoes of slaves between Africa and Arabia has ceased, owing to the presence of His Majesty's ships, a retail trade consisting of the transport of small numbers in small dhows continues. Whereas large numbers of dhows have been examined no capture of dhows carrying slaves has been made during the last 12 months, and the reports referred to draw attention to the difficulties of capture owing to the great circumspection with which the trade is now prosecuted. The slave traders' intelligence is good and the dark hours and adverse weather conditions are skilfully made use of by them.

Mr. DAY: Are these two sloops still on duty there?

Mr. ALEXANDER: Yes.

Commander SOUTHBY: Can the right hon. Gentleman inform the House whether these two sloops have any boats away cruising in execution of these duties?

Mr. ALEXANDER: I cannot say what the position is to-day.

Oral Answers to Questions — LONDON NAVAL CONFERENCE.

CRUISERS.

Commander SOUTHBY: 10.
asked the First Lord of the Admiralty whether, in view of the recent curtailment of the cruiser-building programme and the fact that the four vessels of the "Hawkins" class are four of the most up-to-date and efficient cruisers in His Majesty's Navy, he is now in a position to give an assurance that they will not be scrapped as a result of any deliberations at the Naval Conference?

Mr. ALEXANDER: Under the rules for replacement which have been agreed upon at the Conference, two of the ships of the "Hawkins" class will have reached the age at which they may be replaced in 1934 and 1935, respectively. It has been agreed that the remaining
two, whose completion was delayed owing to conditions following the War, may be replaced in 1936.

Lieut.-Commander KENWORTHY: 15.
asked the First Lord of the Admiralty what is the tonnage of the present cruiser fleets of this country, the United States of America and Japan, respectively, on the Washington basis of measurement, and counting only ships built and less than 20 years old?

Mr. ALEXANDER: The standard tonnage of the cruiser fleets of the British Empire, United States of America and Japan, counting only ships built and less than 20 years of age, is to-day:

British Empire
327,111


United States of America
90,500


Japan
166,815

Lieut.-Commander KENWORTHY: Is the right hon. Gentleman aware that under the figures that he has agreed on at the Naval Conference every one of these three fleets will be increased, and the American fleet very substantially?

Mr. ALEXANDER: Of course, that is putting the most unfair construction on the result of the Naval Conference. The hon. and gallant Member has asked for figures of ships built at the moment. He takes no account of ships building, or of programmes, or the position that would have been arrived at in 1936 had the programme been continued. I hope that such suggestions will cease.

Lieut.-Commander KENWORTHY: Is the right hon. Gentleman aware that I am the best judge of whether my question is fair or not? Was this not a Conference for the limitation and reduction of armaments?

Mr. ALEXANDER: It was certainly a Conference for limitation, and limitation has proceeded to such an extent that President Hoover announced that the result of the Conference would save his country £200,000,000 in arriving at parity.

Colonel GRETTON: Is the period of life of 20 years for cruisers a correct one?

Mr. ALEXANDER: I wish that hon. Members would await the full details which will be given to the House. Twenty years is to be the general life, but there will be some detailed variations.

Mr. CHURCHILL: When will those details be given?

Mr. ALEXANDER: The Write Paper that was mentioned the other day, I hope, will be in the hands of the House either this afternoon or to-morrow morning, and, if any further details are required, it will be open to Members to ask for them.

SUBMARINES.

Lieut.-Commander KENWORTHY: 45.
asked the Prime Minister whether the other nations possessing submarines are to be invited to adhere to the rules agreed upon at the present Naval Conference under which submarines may attack merchant shipping at sea; and what will be the procedure for inviting the adherence of the other naval Powers possessing submarines to these rules, especially those who are not members of the League of Nations?

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): The procedure to be adopted for securing universal acceptance of the rules governing submarines will presumably, at the appropriate time, engage the attention of the Preparatory Commission at Geneva, representation on which is not confined to members of the League of Nations and whose task in preparing the way for a general disarmament treaty will, it is hoped, be facilitated by the achievements of the London Naval Conference.

Commander SOUTHBY: Is it, not a fact that the rules regarding visit and search of merchant ships in war time by men-of-war have always applied to submarines in exactly the same way as to surface ships?

Mr. SNOWDEN: I do not know anything about what is the existing law in the matter. I have been asked to say what is likely to arise out of what is taking place at the Naval Conference, and my answer must be confined to that.

Commander BELLAIRS: Will it be proposed to other nations at the same time to apply the rules to aircraft as well?

Oral Answers to Questions — ROYAL NAVY.

ENGINE-ROOM ARTIFICERS.

Mr. MARKHAM: 11.
asked the First Lord of the Admiralty whether he is
aware that in certain cases the duties of engine-room artificers are being increased in the direction of detailing them to act as policemen or regulators and to note liberty men going on shore or returning from leave; and why this is being done, seeing that this duty is definitely an executive petty officer's duty, as laid down in King's Regulations, Article 1510?

Mr. ALEXANDER: The answer to the first part of the question is in the negative, and as regards the second part, my hon. Friend is under some misapprehension as to the meaning of the Regulations. If any engine-room artificer is dissatisfied with his duties he should ask in the service manner to be allowed to represent the matter to his captain.

Mr. MARKHAM: Does that mean that we shall have no opportunity in this House of bringing such points to the attention of the Admiralty?

Mr. ALEXANDER: I am always glad to have points of interest or grievance brought to my notice, but I think it is very undesirable that points regarding serving ratings should be brought direct to my notice without their having been through the men's senior officers.

Captain W. G. HALL: Is the right hon. Gentleman aware that on the West Indies Station this grievance is very much felt by the engine-room artificers—their being put on canteen duty—that they have made representations through the proper channels, through their captains, and that they have not had any redress?

Mr. ALEXANDER: I answered the first part of the original question in the negative; that is to say, there was no extension of the practice; but, if engine-room ratings reach the rank of petty officers, they must be expected to take their share of petty officers' duties.

Mr. MOSES: 12.
asked the First Lord of the Admiralty what are the numbers of engine-room artificers and mechanicians, respectively, at present borne on His Majesty's Ship "Ross"; and whether the numbers now borne are to be the future complement for engine-room duties in all ships of this class?

Mr. ALEXANDER: One chief engine-room artificer and two engine-room artificers are at present borne in "Ross" while in commission with special complement; ships of this class, when in full
commission, carry one additional engine-room artificer. No mechanicians are borne, and no change in these complements is contemplated.

OFFICERS' RETIREMENT (RANK AND PAY).

Captain HALL: 13.
asked the First Lord of the Admiralty the reasons for the practice of his Department in promoting some ranks of naval officers on the day before and others on the actual day of retirement; and whether it makes any difference in the pension and other rights?

Mr. ALEXANDER: As the reply is rather long, I will, with my hon. and gallant Friend's permission, circulate it in the OFFICIAL REPORT.
Following is the reply:
The regulations provide in general for the grant of a step in rank at the discretion of the Admiralty to naval officers on the date of their retirement, or in some cases after retirement on reaching a specified age limit, in recognition of their services while on the active list. The grant of a step in rank under these conditions does not affect their retired pay, which is dependent on the rank last held on the active list, but in the event of their being re-employed on full pay they would receive the emoluments of the higher rank together with a bonus of 15 per cent. if re-employed in time of peace, or 25 per cent. in time of war or emergency, in lieu of counting their further service for increase of retired pay. Pensions to widows, etc., are normally dependent upon the rank last held by the officer on the active list, subject to certain exceptions.
Rear-Admirals, Engineer Rear-Admirals, and Surgeon Rear-Admirals whom it is not intended to employ further may be placed on the retired list on promotion to those ranks, and such retirement takes place from the day following the date of their promotion. Officers thus retired after promotion to the above ranks on the active list receive retired pay on the scale applicable to Rear-Admirals, widows' pensions, etc., being similarly regulated.

NAVAL DEFENCE DOMINION CONTRIBUTIONS).

Mr. WEST RUSSELL: 16.
asked the First Lord of the Admiralty whether the question of the contributions of the
Dominions to Imperial naval defence is to be discussed at the forthcoming Imperial Conference; and, if not, whether he will urge that it should be placed on the agenda?

Mr. ALEXANDER: The agenda for the Imperial Conference have not yet been settled, but I assume that, as on previous occasions, the subjects to be discussed will include naval defence. As regards the particular aspect of the question which is referred to by the hon. Member, I would refer him to paragraphs 2 and 3 of the resolutions on the subject of defence passed by the Imperial Conference of 1923, which were re-affirmed at the Conference of 1926.

SHIPBUILDING (EMPLOYMENT).

Mr. DOUGLAS HACKING: 18.
asked the First Lord of the Admiralty whether he can state the approximate number of persons who will be thrown out of work as a consequence of the decision to build no ships of war during the present financial year?

Mr. ALEXANDER: The right hon. Member is under a misapprehension. No such decision has been arrived at.

ESTIMATES (SAVINGS).

Lieut.-Commander KENWORTHY: 19.
asked the First Lord of the Admiralty what are the estimated savings on this year's Navy Estimates as a result of the Three-Power Naval Agreement achieved at the 1930 Naval Conference?

Mr. ALEXANDER: I would refer my hon. and gallant Friend to my statement on the Naval Estimates. A further statement will be made in due course when the proposals for the 1930 construction programme have been formulated.

Lieut. - Commander KENWORTHY: Does that mean that there will be an increase on the Estimates that have already been passed by the House?

Mr. ALEXANDER: I made the position very plain in my statement on the Estimates—that we had arrived at a very large saving in construction as a result of the policy announced by the Prime Minister in July, 1929, but that it might be necessary for me to introduce a Supplementary Estimate.

Lieut. - Commander KENWORTHY: That means that there will be an increase on the Estimates passed by this House?

Mr. ALEXANDER: Yes, but I think that the hon. and gallant Member should be grateful for the reduction already secured.

Lieut.-Commander KENWORTHY: I would be more grateful if it was greater, and so would the Chancellor of the Exchequer.

TUBERCULOSIS.

Mr. MOSES: 20.
asked the Parliamentary Secretary to the Admiralty whether, in view of the large percentage of engine-room artificers, from apprentices upwards, who are invalided as the result of tuberculosis, he will say what steps are being taken to minimise this cause of invaliding; and whether better conditions of service are being taken into consideration to arrest the increase of tuberculosis which is taking place?

Mr. ALEXANDER: The incidence of tuberculosis in the Navy is not unduly high, neither is it appreciably higher among engine-room ratings than among ratings of the seaman branch. Every effort is made to minimise the causes of tuberculosis. Details of the principal precautions taken are given in King's Regulations and Admiralty Instructions, Article 1393, and these are under constant review to ensure that everything possible is done.

WIRELESS TELEGRAPHY OPERATORS(RETIRING ALLOWANCES).

Mr. GRANVILLE: 14.
(for Mr. HOREBELISHA) asked the First Lord of the Admiralty whether, seeing that under A. F. O. 3049 of 1929, a scheme of retiring allowances and gratuities has been approved for officers of the Royal Fleet Auxiliary Service holding Board of Trade certificates and serving under Board of Trade agreements, he will consider the inclusion in the scheme of wireless telegraphy operators serving in the Royal Fleet Auxiliary Service, seeing that they are directly employed as Admiralty servants; that the wireless staff is treated similarly to pensionable officers in every other respect as regards foreign service, foreign service allowances, tanker bonus, leave, etc.; and that as they are not eligible for benefits from, nor are liable
for, contributions to the National Health Insurance scheme or the Unemployment Insurance scheme, no provision is made towards their future?

Mr. ALEXANDER: Full consideration was given to conditions in the R.F.A. Service before the introduction of the scheme of retiring allowances and gratuities, and it is not proposed further to extend the scope of the scheme as promulgated on 29th November last (Admiralty Fleet Order 3049/29).

Oral Answers to Questions — PALESTINE.

MUFTI OF JERUSALEM.

Mr. MARJORIBANKS: 23.
asked the Under-Secretary of State for the Colonies what action the High Commissioner has taken with regard to the Grand Mufti's letter inciting resistance to the French authorities in Syria?

The UNDER-SECRETARY of STATE for the COLONIES (Dr. Drummond Shiels): As I have already stated, the Secretary of State does not propose to pursue this matter further. I do not think it would serve any public interest to add anything to that statement.

Mr. MARJORIBANKS: Will the hon. Gentleman answer my question? I asked him what action the High Commissioner had taken.

Dr. SHIELS: I have already answered a similar question, and, as I have stated, my Noble Friend is not prepared to make any further statement on the matter.

Mr. MARJORIBANKS: Is the hon. Gentleman aware that on the last occasion he said that the High Commissioner had taken action? I repeat the question: "What action has been taken?"

Sir GEORGE JONES: 31.
asked the Under-Secretary of State for the Colonies whether his attention has been called to the findings of the Palestine Commission against the Mufti in regard to the evidence he gave before them contained in the first paragraph on page 77 of their Report; whether it is proposed to take any action in respect thereto; and, particularly, whether it is proposed to take proceedings against the Mufti under Section 4 of the Commission of Inquiry Ordinance of 1921?

Dr. SHIELS: I have read everything that the Commission have said in their Report with regard to the Grand Mufti. I am not aware of any proposal to take action.

Sir G. JONES: Does the hon. Gentleman think that the Mufti is fit to hold his position in view of the finding against him, namely, that he gave false evidence before the Commission?

Dr. SHIELS: In regard to this matter generally, I would like it to be clearly understood that I do not wish to be made a sounding board for anti-Arab and anti-Jewish propaganda. An hon. Member on the other side of the House a few days ago, made a plea to hon. Members in this connection which I should like to reinforce. We are trying to find a way to peace in Palestine, and these questions are not helpful.

PRISONERS (TREATMENT).

Mr. FREEMAN: 26.
asked the Under-Secretary of State for the Colonies whether he is aware that prisoners confined in Palestine gaols have been flogged for hunger striking; whether he will state the offences for which flogging is inflicted in Palestine gaols; and whether he will give instructions for the law in regard to flogging in Palestine to be assimilated to the law in Britain so that corporal punishment shall only be awarded for the same kind of offence, namely, an assault upon prison authorities, and with the same safeguards as in Britain?

Dr. SHIELS: No, Sir. I am informed that no prisoners have been flogged for hunger striking. With regard to the second part of the question, copies of the regulations governing the question of flogging in Palestine were placed in the Library of the House in March, 1929. Since then the number of offences for which corporal punishment may be awarded has been further reduced. I will take steps to have a copy of the revised regulations placed in the Library. It is not considered practicable at present to assimilate the law in all respects to that in force in this country.

Mr. FREEMAN: Are political prisoners accorded the same privileges, as regards diet, clothing and discipline, as in other civilised countries, whether they be Arabs or Jews?

Dr. SHIELS: There is no provision in Palestine law for political prisoners.

Mr. BROCKWAY: Will the Under-Secretary consider applying to Palestine the same rules as are now applied to India?

Dr. SHIELS: The position in Palestine in regard to prisoners is largely determined by the nature of the buildings and other matters of that kind. Every effort is being made to improve prison conditions in Palestine, but without a good deal of expenditure on buildings and other arrangements, it is not possible to bring the system in Palestine up to what we would like it to be. Progress is, however, being made.

Mr. FREEMAN: Will the hon. Gentleman take steps to see what can be done in according reasonable privileges to political prisoners?

HAIFA BREAKWATER.

Rear-Admiral SUETER: 29.
asked the Under-Secretary of State for the Colonies whether any financial assistance has been given by the British Government towards the construction of the Haifa breakwater in Palestine; and, if so, what is the amount of the contribution?

Dr. SHIELS: No contribution has been made by His Majesty's Government towards the cost of these works.

JERUSALEM (JEWS AND ARABS).

Mr. MARJORIBANKS: 30.
asked the Under-Secretary of State for the Colonies what are the proportions of Jewish and Arab population in Jerusalem?

Dr. SHIELS: I regret that I have not the necessary figures to enable me to answer this question precisely, but it will be seen from page 7 of the report of the Commission of Inquiry that Jerusalem is now estimated to have a small majority of Jewish inhabitants.

Mr. MARJORIBANKS: Is the hon. Gentleman aware that the Arabs have a very large majority on the municipal council; and will he take some steps to inquire into this matter and to redress the balance, if possible?

Dr. SHIELS: While I note what the hon. Member says, I am not prepared to accept the accuracy of his statement.

CEYLON (INDIANS)

Major GRAHAM POLE: 24.
asked the Under-Secretary of State for the Colonies whether any representations have been received from the representatives of the Indian immigrant community in Ceylon in respect of the proposals made by the Governor of Ceylon and tentatively accepted by the Secretary of State; and, if so, whether he will state the terms of any such representations?

Dr. SHIELS: I have received representations from the Ceylon Head Kangany's Association, claiming to represent 700,000 Indian labourers in Ceylon, protesting against any modification of the franchise conditions recommended by the Special Commission on the Constitution.

CYPRUS (ARMENIANS).

Mr. GRAHAM WHITE: 25.
asked the Under-Secretary of State for the Colonies the attitude of the Government towards the proposal to form an Armenian settlement in Cyprus?

Dr. SHIELS: The Secretary of State's attention has been drawn to an article in a Greek newspaper regarding an alleged project for an Armenian settlement in Cyprus. He has no other information, but is in communication with the Governor of Cyprus en the subject.

GOLD COAST COLONY (PETITION).

Miss RATHBONE: 32.
asked the Under-Secretary of State for the Colonies whether any reply has bean given or action taken with regard to the petition presented in October, 1929, to the Governor of the Gold Coast Colony by Fia Adamah II., chief of the Stool of Agbosome, which petition was forwarded by the Governor of the Colony to the Secretary of State in December, 1929?

Dr. SHIELS: Yes, Sir. The petition has been considered and laid before His Majesty, to whom it was addressed. It put forward two separate claims: one for the restoration of an annual payment which had been surrendered for a lump sum in 1S93, and the other the independence from the Awuna Stool. The reply was to the effect that no claim for the revival of the payment could be entertained in view of its surrender in 1893,
and that with regard to the claim to independence, the proper procedure was laid down in the Gold Coast Constitution and the Native Administration Ordinance, and should be followed.

Oral Answers to Questions — TRADE AND COMMERCE.

EMPIRE MARKETING BOARD (FILMS).

Mr. DAY: 33.
asked the Under-Secretary of State for Dominion Affairs whether any fees are received, either by the Empire Marketing Board or others, for the hire of the films taken under the direction of the Empire Marketing Board; whether these films are booked by contract; whether they are booked through an ordinary renting agency; can he state the length of these films; and are they classified for quota purposes under the Cinematograph Films Act. 1927?

The UNDER-SECRETARY of STATE for DOMINION AFFAIRS (Mr. Lunn): The Empire Marketing Board have so far placed one film only on the Commercial market. That film is booked through an ordinary renting agency under a contract, which provides for the receipt by the Empire Marketing Board of a share of the fees. The film is between 3,000 and 4,000 feet in length and has been registered as a quota film under the Cinematograph Films Act, 1927.

Mr. DAY: Have arrangements been made to place this film in the Dominions and Colonies as well?

Mr. LUNN: I could not say just now. Perhaps my hon. Friend will put down another question.

Mr. ARTHUR MICHAEL SAMUEL: Is the hon. Gentleman aware that one of these films is being used in America and has American scene captions, although it represents English scenes?

Mr. LUNN: Yes.

Mr. SKELTON: On a point of Order. Can arrangements be made to inform the House when the first 100,000 has been reached.

BUILDING MATERIALS (IMPORTS).

Major COLVILLE: 46.
asked the President of the Board of Trade if the im-
portation of foreign building materials has increased during the period since June, 1929?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. W. R. Smith): From an examination of the imports of building materials of various descriptions recorded in the accounts relating to trade and navigation of the United Kingdom it would appear that the trade in question is seasonal; the total imports reached their highest point in August, and from that month the figures show a steady decrease. Imports during the first three months of this year show an increase over the corresponding period of 1929.

Major COLVILLE: Is the hon. Gentleman aware that the quantity of building materials imported last year, as shown in the trade returns, would have provided work for some 30,000 workmen in this country?

SOUTH AMERICA.

Mr. A. M. SAMUEL: 50.
asked the Secretary to the Overseas Trade Department what action his Department has initiated for the purpose of bringing before exporters the recommendations of the D'Abernon Report on South American trade; and what his Department proposes to do to help exporters to put the recommendations into operation?

Mr. GILLETT (Secretary, Overseas Trade Department): My Department has called the attention of all British chambers of commerce, trade associations and other organisations, and of over 1,500 individual firms, to the D'Abernon Report. In addition, the Commercial Counsellor at Buenos Aires, who accompanied the Mission, has recently interviewed over 400 firms in this country Interested in trade with Argentina and has given an address to the British Export Society. The Overseas Trade Development Council of my Department has already met Lord D'Abernon and the other members of his Mission, and discussions are now taking place with representatives of selected industries.

Mr. SAMUEL: As these hundreds of persons and associations have received copies of this report, and as the report
made certain specific suggestions, does not the hon. Gentleman think that this is a matter in which he himself ought to take a personal lead?

Mr. GILLETT: That is just what I am doing; I am interviewing the people concerned.

ROYAL AIR FORCE COLLEGE,CRANWELL.

Captain HAROLD BALFOUR: 35.
asked the Under-Secretary of State for Air whether De H. 9 A biplanes are still used for training cadets at the Royal Air Force Cadet College, Cranwell; if it is proposed to replace this type by more modern machines; and, if so, how soon this will take place?

The UNDER-SECRETARY of STATE for AIR (Mr. Montague): The answer to the first part of the question is in the affirmative. As regards the second and third parts, it is intended to supply Atlases, which are the standard type of Army co-operation machine, in replacement during the present summer.

Oral Answers to Questions — AVIATION.

AIRSHIPS (MOORING MASTS).

Mr. LOUIS SMITH: 36.
asked the Under-Secretary of State for Air the number and precise position of mooring masts in any part of the world suitable for anchoring R 100 and R 101; and whether any further masts are being constructed in Canada in view of the projected flight to that country?

Mr. MONTAGUE: As regards the first part of the question, four mooring masts have been erected for the express purpose of mooring R 100 and R 101. They are situated, respectively, in this country, at Cardington; in Egypt, on the Suez Canal, 2½ miles from Ismailia; in India, 10 miles from Karachi; and in Canada, at St. Hubert, four miles from Montreal. The answer to the second part of the question is in the negative.

AERODROMES.

Mr. L. SMITH: 37.
asked the Under-Secretary of State for Air the number
of aerodromes now in existence in this country, dividing them into State-owned, municipal-owned, and private-owned; and indicating which of the English and Welsh counties are without any?

Mr. MONTAGUE: As regards the first part of the question, the lumber of licensed civil aerodromes in Great Britain and Northern Ireland is 127, of which five are State-owned, five are municipal-owned and 117 are privately-owned. In addition, there are 48 Royal Air Force aerodromes. As regards the second part, all the counties of Wales, except Flint, and the following counties of England are without aerodromes: Cumberland, Westmorland, Shropshire, Rutland, Huntingdonshire, Monmouthshire, Herefordshire and Cornwall.

KILTON VALLEY ROAD,YORKSHIRE.

Mr. MANSFIELD: 38.
asked the Minister of Transport if his attention has been drawn to the dangerous road known as Kilton Valley, in the North Riding of Yorks; and will he consider holding an inquiry into this matter, with a view to assisting the North Riding County Council and the local authorities concerned to prepare an agreed suitable scheme for improving this road?

The MINISTER of TRANSPORT (Mr. Herbert Morrison): I am informed that the North Riding County Council have in mind certain alternative schemes for the improvement of the condition of the road through the Kilton Valley, but no definite proposal has yet been submitted to me. I am prepared to give consideration to any definite application which may be forthcoming, but am of opinion that no useful purpose would be served by holding an inquiry in the meantime.

Mr. MANSFIELD: Is the right hon. Gentleman aware that this dangerous road is causing a great deal of anxiety to motorists and to the thousands of workmen who have to pass to and from their work every day; and will he use his influence with the North Riding County Council and the other local authorities concerned to try to get this deadlock removed and see if it is not possible to have an agreed scheme?

Mr. MORRISON: The hon. Member may be sure that I shall be as helpful as I can, but the highway authority is the county council.

GOVERNMENT DEPARTMENTS(NEW OFFICES).

Sir K. WOOD: 40.
asked the First Commissioner of Works whether any decision has yet been arrived at to erect new Government offices on the site of Montagu House and reaching from Whitehall to the Embankment?

The FIRST COMMISSIONER of WORKS (Mr. Lansbury): It has been decided to erect new Government offices on the site of Whitehall Gardens and Montagu House, and a Bill to give effect to this decision will be introduced in the Autumn Session.

Sir K. WOOD: Can the right hon. Gentleman give any idea of what the cost of these buildings will be?

Mr. LANSBURY: No, but perhaps the right hon. Gentleman will await details.

Lieut. - Commander KENWORTHY: Will any alternative gardens be provided in place of those which will be built over?

Mr. LANSBURY: I would like the hon. and gallant Gentleman to wait and see the Bill.

Lieut.-Colonel HENEAGE: For whom are these offices intended?

Mr. LANSBURY: For public officials, as sanctioned by this House.

HOUSE OF COMMONS (REFRESHMENT DEPARTMENT).

Mr. FREEMAN: 41.
asked the hon. Member for the Gorton Division, as Chairman of the Kitchen Committee, whether lobsters supplied to the House of Commons are boiled alive?

Mr. COMPTON: The lobsters supplied to the House of Commons are cooked in the orthodox way, and I am informed that the fish is alive when placed in the steamer, but, directly the steam is turned on, death is instantaneous.

Mr. FREEMAN: Is the hon. Gentleman quite satisfied that death is instantaneous, in view of the fact that groans and cries
can be heard for a considerable time after the lobster has been immersed in boiling water; and, as this is an inhuman way of killing and cooking the animal, will he take steps to prohibit its use as an article of diet in the House of Commons?

Commander SOUTHBY: And will the hon. Gentleman also take steps to prevent the brutal custom of eating live oysters in the House of Commons?

Mr. COMPTON: I deny the suggestion in the first supplementary question, that there are anything in the nature of cries from the fish. This is the only way of cooking it known to those engaged in that profession, and the same thing applies to shrimps, mussels, winkles, cockles and all other fish of that kind. Taking into consideration, however, the fact that this House has abolished one form of capital punishment, perhaps my hon. Friend and those associated with him will provide a humane killer for lobsters.

Oral Answers to Questions — INDIA.

ROYAL INDIAN MARINE (SLOOP).

Major POLE: 42.
asked the Secretary of State for India whether any provision is made in the Government of India's Estimates for 1930–31 in respect of the sloop ordered by the Government of India for the Royal Indian Marine?

The SECRETARY of STATE for INDIA (Mr. Wedgwood Benn): Yes, Sir; for about 12½ lakhs—say £94,000.

DISTURBANCES, CALCUTTA.

Earl WINTERTON: (by Private Notice) asked the Secretary of State for India whether the serious disturbances of yesterday in Calcutta have now ceased, and if he is in a position to state the number of officers of the law and other public officials injured in the course of their duty in riots and disturbances in that city within the last four weeks?

Mr. BENN: My latest information, which was received last night, is based on a Report from the Bengal Government that the situation in Calcutta was quiet yesterday afternoon after serious rioting bad occurred in the morning. As regards the second part of the question, I am afraid I cannot state the figures without
inquiry from India. I am quite satisfied of the ability of the local authorities to keep the situation under control.

Earl WINTERTON: Is it not a fact that in the disturbances of yesterday, for the first time since the days of Non-cooperation, Europeans have been singled out for attack, abuse and murderous assault; and will the right hon. Gentleman, when inquiring from the Government of India, obtain information whether the Government of India are able to assign any cause for this most disturbed state of affairs?

Mr. BENN: I have no official information which bears out the statement of the Noble Lord.

Earl WINTERTON: May I ask the right bon. Gentleman, especially in view of the fact that we on this side have not hampered him by criticism in the last few weeks, whether he is aware of the growing anxiety which there is in this country at the progressive increase of lawlessness of the most serious character in the principal centres of India during the last few weeks; and will he, when the House resumes, be in a position to inform the House what steps the Government of India propose to take to stop that increase?

Mr. BENN: I need hardly inform the Noble Lord that the state of affairs has been the constant, anxious and careful concern of the Government.

Major POLE: Is it not the case that the riots in Calcutta have been confined entirely to one quarter—the Indian quarter—and did not the lady who was injured go into that quarter against the orders of the police?

Mr. BENN: I cannot say that. My information from official quarters is that the riots occurred in two quarters, but I cannot confirm or deny the statement on the other point.

Mr. BROCKWAY: Does not the right hon. Gentleman realise that the situation throughout India to-day is rapidly reaching the position in which Ireland was—[Interruption.]

Brigadier-General CLIFTON BROWN: Are the British troops, who usually go away from the plains up to the hills on
the 15th April, being kept down in the disturbed centres to protect the in habitants?

Mr. BENN: I should not attempt to deal with a detail of that kind at this end. We must leave it to those on the spot.

SAFE GUARDING DUTIES(WRAPPING PAPER).

Major COLVILLE: 44.
asked the President of the Board of Trade to what extent the output of wrapping paper in this country has increased since the beginning of 1929?

Mr. W. R. SMITH: As was indicated in the reply to a question put by the hon. and gallant Member on 4th March, the information supplied by the National Association of Packing and Wrapping Paper Makers does not cover the total output of dutiable wrapping paper. The figures available, which relate to the out, put of firms whose returns in 1924 covered about three-fifths of the total output of such paper, show the following variations in output in the course of 1929:

Tons.


January—March
…
42,497


April—June
…
41,556


July—September
…
42,363


October—December
…
46,460

Major COLVILLE: Is it not the case that the output of British mills has, in fact, increased by about 55 per cent. since this industry was safeguarded?

Mr. SMITH: That is not the question on the Paper.

Lieut.-Colonel ACLAND-TROYTE: Is it not a fact that there has been a great increase in employment in this industry since the duty was imposed?

FORESTRY WORKERS, LENNOX MOOR (WAGES)

Mr. STEPHEN: 47.
asked the Parliamentary Secretary to the Board of Trade, as representing the Forestry Commissioners, whether the wages of the workers employed at Lennox Moor are to be increased; and, if at, by what amount?

Mr. W. R. SMITH: The answer is in the negative.

Mr. STEPHEN: Is my hon. Friend aware that there is great discontent among the workers and that they are not receiving a fair wage, and will he look into the matter again?

Mr. SMITH: I was not aware of that fact, but I will take steps to have it mentioned in the proper quarter.

Mr. C. WILLIAMS: Is the hon. Gentleman aware that they are not the only people who are discontented with this Government?

Mr. SMITH: I was not aware of that.

Mr. BROCKWAY: Can my hon. Friend tell us what the present wage rates are?

Mr. SMITH: I am under the impression that the wage rate in this case is 38s. 3d. per week.

LOCAL GOVERNMENT (SCOTLAND)ACT.

Mr. DUNCAN MILLAR: 51.
asked the Secretary of State for Scotland if he can state the deficiency in the rates in each of the burghs and parishes in Fife arising under the de-rating provisions of the Local Government (Scotland) Act, 1929, and the total amount of the grant required to meet this deficiency?

The SECRETARY of STATE for SCOTLAND (Mr. William Adamson): I regret that the information asked for is not yet available, but a statement will be sent to the hon. and learned Member when the necessary particulars have been received from the local authorities.

Mr. MILLAR: Does the right hon. Gentleman expect to receive these particulars in a week or two?

Mr. ADAMSON: Yes. I expect to receive them very shortly.

SOLICITORS (FRAUD).

Sir JOHN FERGUSON: 52.
asked the Attorney-General if he can give the number of solicitors convicted under the criminal law for fraudulent conversion of clients' property for the period 1st May, 1929, to 14th April, 1930?

The SOLICITOR - GENERAL (Sir James Melville): My hon. and learned Friend is informed by the
Law Society that there have been 11 convictions during the period mentioned.

Sir J. FERGUSON: Is the hon. and learned Gentleman aware that there is a very general feeling among the public that the Incorporated Law Society ought to put its house in order in this respect?

Mr. MARJORIBANKS: 53.
(for Captain CAZALET) asked the Attorney-General whether he will introduce legislation, by way of insurance or otherwise, by which solicitors convicted of fraud may be enabled to refund, in whole or in part, the losses of those who have suffered by their fraud?

The SOLICITOR-GENERAL: I am fully aware of the importance of the matter to which the hon. and gallant Member has drawn attention. I understand that it has for some time been under the consideration of the Law Society, with whom my friend the Lord Chancellor is in communication. The time is not yet ripe for the introduction of legislation upon the subject.

Mr. MARJORIBANKS: Will the hon. and learned Gentleman communicate with the Law Society?

The SOLICITOR-GENERAL: Yes, certainly, and, if I do not do it, I will ask my Noble Friend the Lord Chancellor to resume negotiations with them if he is not still in communication with them.

Mr. C. WILLIAMS: When will the time be really thoroughly ripe?

Mr. MUGGERIDGE: Does not my hon. and learned Friend think it advisable to let the public know that it is better to leave funds to the Public Trustee than to leave them in the hands of private practitioners?

SUDAN (BRITISH AND EGYPTIAN TROOPS).

Mr. SMITHERS: 54.
asked the Secretary of State for War what changes have been made during the last six months in the troops quartered in the Sudan; what was the number of Egyptian troops in the Sudan on the last available date; and how does that compare with the number in June, 1929?

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Shinwell): Apart from the relief in December last of the 2nd Battalion, The Green Howards, by the 2nd Battalion, The King's Own Royal Regiment, no changes have been made during the last six months in the troops stationed in the Sudan. All Egyptian troops were removed from the Sudan in 1924 and none have been stationed there since that date.

Mr. SMITHERS: Is it the policy of the Government under any agreement arrived at with the delegation from Egypt that any troops shall be sent back to the Sudan?

Mr. SHINWELL: I think the hon. Member had better await the result of the present negotiations.

VIVISECTION.

Mr. FREEMAN: 55.
asked the Secretary of State for the Home Department whether he is now in a position to state the number of experiments that were conducted by vivisection during 1929; and, if so, how many were conducted on dogs and how many when inspectors were present in each case?

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Short): The figures are not yet available.

WILD FLOWERS (PROTECTION).

Mr. RAMSBOTHAM: 56.
asked the Home Secretary if he can state the number of county councils which have adopted a new model by-law to prevent the uprooting of wild flowers; and whether he has brought to the notice of all county councils the desirability of taking this step?

Mr. SHORT: Twenty-nine counties have adopted this form of by-law. My right hon. Friend has not circularised county councils with regard to it, but he understands that it has been brought to the notice of all the councils.

CORONERS, NORTHUMBERLAND(SALARIES).

Mr. EBENEZER EDWARDS: 57.
asked the Home Secretary whether he can state
the salary and emoluments of the coroners in Northumberland and in the city of Newcastle-on-Tyne?

Mr. SHORT: The coroners in question are remunerated by salary only. As their salaries may be fixed by agreement, my right hon. Friend is not always in possession of the current figures. The amounts in 1929 were:

£


Northern District
300


Southern District
600,


Berwick-on-Tweed Borough
50


Newcastle-on-Tyne County Borough
850

Oral Answers to Questions — UNEMPLOYMENT.

STATISTICS.

Mr. STEPHEN: 59.
asked the Minister of Labour the number of claims to unemployment benefit by men and women, respectively, from the coming into operation of the new Act to the latest available date, which have been rejected on the ground that the applicant is not normally in insurable employment; and the corresponding figures for the previous two years?

Mr. D. G. SOMERVILLE: 58.
asked the Minister of Labour the number of applications for unemployment benefit which have been refused since the operation of the Unemployment Insurance (No. 2) Act?

The MINISTER of LABOUR (Miss Bondfield): Statistics of the disallowance of claims to benefit are compiled at monthly intervals, and figures for the period since 13th March are, therefore, not yet available.

APPEALS.

Mr. STEPHEN: 60.
asked the Minister of Labour if she is aware that applicants For unemployment benefit who sign the form which permits their cases to be heard by a court of referees consisting of a single person, lose the possibility of appeal to the Umpire when the decision is adverse, which would statutorily be granted if the court were not unanimous; and if she will consider advising that all such cases should be adjourned for consideration by a full court?

Miss BONDFIELD: I am afraid I could not adopt this suggestion, since it would defeat the object on account of
which the claimant has consented to have the claim dealt with by a single person, namely, in order to obtain an immediate decision. The proper remedy is for the workers' and employers' representatives to attend the courts, and I am taking such steps as are open to me to secure such attendance.

Mr. STEPHEN: Will the right hon. Lady see that the applicants are informed of the possibility shown in the question before they are asked to sign the form, because my understanding is that they are pressed to sign the form?

Miss BONDFIELD: I understand that all applicants are given the option.

KENYA (NATIVE DANCES).

Mr. BROCKWAY: 22.
(for Mr. HORRABIN) asked the Under-Secretary of State for the Colonies whether his attention has been drawn to the action of certain European settlers in Kenya Colony who have permitted the use of their lands for the native dances prohibited by the Governor in the native reserves; and whether the Government proposes to take any action in the matter?

Dr. SHIELS: The reply to the first part of the question is in the negative. I shall be glad to receive any further particulars which my hon. Friend can supply.

EMPIRE SETTLEMENT.

Mr. GRANVILLE: 43.
(for Viscount ELMLEY) asked the President of the Board of Trade the number of people who emigrated to Canada, Australia, New Zealand, and South Africa, respectively, during the year 1929; and how far emigration to these Dominions has been increasing during the last few years?

Mr. W. R. SMITH: The figures for which the Noble Lord asks in respect of the four years 1926 to 1929 will be circulated in the OFFICIAL REPORT. The figures show that the aggregate of the emigrants to the four Dominions specified has decreased from about 119,000 in 1926 to about 94,400 in 1929; the emigration to Canada has increased year by year.
Following are the figures:
The numbers of British subjects who were recorded in the lists of passengers
from ports in this country as leaving permanent residence in the United Kingdom to take up permanent residence in British North America, Australia, New Zealand and British South Africa, respectively, in each of the years 1926 to 1929 were as follows:

Year.
British North America.
Australia.
New Zealand.
British South Africa.


1926
49,632
44,513
16,565
8,295


1927
52,916
40,991
7,811
7,572


1928
54,709
28,714
4,975
7,095


1929
65,558
18,377
4,700
5,766

DARTFORD (INCORPORATION).

Mr. PALMER: 49.
(for Mr. MILLS) asked the Minister of Health if he is now able to state the present position regarding incorporation; and whether the application of the urban district council of Dartford is likely to be heard in the near future?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Miss Lawrence): My right hon. Friend is informed that petitions before the Privy Council, including that from Dartford, are now under consideration. It is not possible at the moment to say when an inquiry into the position from Dartford will be held.

QUESTIONS TO MINISTERS.

Commander BELLAIRS: I desire to ask you, Mr. Speaker, a question affecting the Privileges of Members of Parliament who desire to ask questions on any subject, and I apologise for the short notice which I have given. I handed to the Clerk at the Table yesterday a question as a test question, as we have repeatedly had questions refused on compulsory labour in Russia. The products of that compulsory labour reach this country, and therefore it intimately concerns this country. I desire to ask you whether we may put these questions which so intimately concern this country?

Mr. SPEAKER: The hon. and gallant Member asks me a question which has often been asked before in regard to what I may term the censorship of ques-
tions. The duty cast upon the Clerks in this respect is very difficult and onerous, and I think is generally fulfilled to the general satisfaction of the House. There may be some questions which Members think should be passed which are not passed, but I do not think that I should be serving any useful purpose if I entered into the merits, or otherwise, of any particular question, or set of questions. Very often questions are put in which only a day or two before had been answered, and it appears to me, as I think it will to the House, to be a thorough waste of time to keep on asking the same question over and over again. That very much applies to the case which the hon. and gallant Gentleman has brought to my notice.

Commander BELLAIRS: I think that there is some mistake on that point. Repeated questions have been asked about prison labour in Russia, but we have not had questions on compulsory labour in Russia. It is reaching large dimensions in regard to farm labour, timber labour, and factory labour, because the people on the farms labour in the factories, and their products are reaching this country. [HON. MEMBERS: "Speech!"] May we not put questions on these subjects?

Mr. SPEAKER: It would obviously be a very improper thing for me to enter into an argument on the question which the hon. and gallant Gentleman has raised, but I think that he will find it best, and the House will find it more convenient, if it is left to me to decide whether a question should be put on the Order Paper or not.

Commander BELLAIRS: I know that I am not allowed to repeat the question, but may I say this. My test question simply asks that the subject should be raised at the League of Nations.

Mr. CHURCHILL: Are we to understand that you propose to give this specific matter your consideration? If so, that would be perfectly satisfactory.

Mr. SPEAKER: The right hon. Gentleman is aware that I am always giving these matters consideration, and, I will certainly give this particular question further consideration.

Mr. THURTLE: May I ask you, when you take this matter into consideration,
to bear in mind that there are many Members who feel that in recent times questions have appeared on the Order Paper dealing with the internal affairs of Russia which they thought ought not to have appeared on the Paper?

Mr. SPEAKER: I have been getting criticism because I have not allowed questions, and now I am getting criticism because I have allowed them. so that I am getting it on both sides.

Mr. SANDERS: When you are considering the question of compulsory labour in Russia, will you take into account the likeness between that and the transfer of labour in this country?

Mr. HAYCOCK: Will the same latitude be extended to questions in regard to internal affairs in Italy, yugoslavia, and Hungary, as to questions about internal affairs in Russia?

Mr. SPEAKER: I have not yet said that I am going to give any latitude.

EGYPT (TREATY NEGOTIATIONS).

Mr. MARJORIBANKS: 8.
asked the Secretary of State for Foreign Affairs whether he proposes at any stage to consult the Italian Government as to the treaty with Egypt?

Mr. DALTON: No, Sir. But if the Italian Government wish to submit comments on the Treaty with Egypt in so far as it concerns the position of their nationals, I have no doubt that they will do so.

Mr. MARJORIBANKS: is the Under-Secretary aware that the statement of the Foreign Secretary might be construed, and has been construed, as a direct invitation to the Italian Government to intervene in Egypt in favour of Italian interests; and, as the Italian Government are directly concerned in this a matter to the extent of 50,000 Italians in Egypt, will he consult the Italian Government?

HON. MEMBERS: Speech

Mr. DALTON: I doubt whether the Italian Government need the assistance of the hon. Member in order to carry out its duty.

Earl WINTERTON: A most impertinent answer.

Mr. SKELTON: If it is necessary for the Under-Secretary to have communications with the Italian Government, will he treat them a little more courteously than he treats hon. Members in this House.

Mr. CHURCHILL: I wish to ask the Chancellor of the Exchequer whether the Government propose to-morrow to make any announcement to the House on the subject of the Egyptian negotiations?

Mr. SNOWDEN: There is a question on the Paper for to-morrow in the name of the right hon. Gentleman, and the Secretary of State will be present, and hopes that he may then be in a position to make some statement.

BUSINESS OF THE HOUSE.

The following Motion stood upon the Order Paper in the name of the PRIME MINISTER:
That this House do meet To-morrow, at Eleven of the clock; and that no questions shall be taken after Twelve of the clock.

Mr. CHURCHILL: With regard to this Motion, may I ask the Chancellor of the Exchequer why it is on the Paper in an unusual form? It ends in a form which is different from that to which we have been accustomed. May I ask what is the reason?

Mr. P. SNOWDEN: The difference to which the right hon. Gentleman refers is, I suppose, that no hour is stated for the rising of the House. The reason for that is that the Army and Air Force (Annual) Bill has to be considered, and, as the House knows, it must be passed into law by the 30th of this month. The reason why we have not stated any hour for rising to-morrow is that we must ensure that this Bill will be passed; but I may add that there is no desire, certainly on the part of the Government, to keep the House late, and we hope that hon. Members will be able to get away in very good time.

Sir K. WOOD: But is the right hon. Gentleman aware that the form in which the Motion was always put down followed an agreement between all parties in the House in order to preserve the sittings of the House to 5 o'clock, so that private Members might have an opportunity of
putting questions to the Government and debating any subjects which they desired to raise?

Mr. SNOWDEN: I think there will be plenty of opportunity for hon. Members, other than the right hon. Gentleman—[HON. MEMBERS: "Oh!"]—to put as many questions as they desire. I have stated the reason why the Motion stands in this form, and it rests entirely with the House to decide as to whether or not we shall rise early.

Sir K. WOOD: Has it not always been put down with the idea that the Government will keep a House until somewhere about five o'clock in order that private Members may have an opportunity of raising questions in which they are interested? Is the right hon. Gentleman not aware that it is not a question of whether hon. Members will have an opportunity of bringing forward subjects, but a question of following a well-established understanding that, in the interests of private Members, the Government themselves will keep a House till five o'clock? That has always been done for the last five or six years, or more than that.

Earl WINTERTON: On a point of Order. Is it not a fact that this is a debatable Motion? If so, I respectfully suggest that the Question should be put, in order that we may be in a position to debate this matter in proper form.

Mr. SPEAKER: The Motion is debatable.
Motion made, and Question proposed,
That this House do meet To-morrow at Eleven of the Clock; and that no questions shall be taken after Twelve of the Clock."—[Mr. P. snowden.]

Sir K. WOOD: This gives me an opportunity of making some observations, in no spirit of hostility, to the right hon. Gentleman opposite, as he seemed to infer. All I am endeavouring to do is to preserve a long-established practice, which I am anxious not to see disturbed by any alteration in the form of the Motion. Perhaps I may recall to the right hon. Gentleman the fact that many years ago it was arranged, in the interests of private Members, that on the day of Adjournment the proceedings should be maintained by the Government keeping a quorum until five o'clock, in order that
private Members might have an opportunity of raising any questions they desired. There was a sort of mutual understanding. It may have been broken on one occasion, but except for that occasion it has always been maintained, whatever Government has been in office. All I am anxious to put to the right hon. Gentleman is whether there is any intention on the part of the Government, by altering the form of this Motion, to interfere with what I think is a very desirable practice from the point of view of private Members.

Mr. BENSON: If there is not sufficient interest in the proceedings by hon. Members opposite to maintain an attendance of 40 Members, why should the Government keep the House sitting?

Mr. ERNEST BROWN: In answer to the point which has been just put, it may be that there is no organised party which desires to keep a House, but it may be that an individual private Member may have a very vital point to put, and it is most important that this good old custom should be maintained. It may concern an independent Member who may not have 40 Members associated with him.

Mr. SNOWDEN: I have been in the House a good deal longer than either the right hon. Gentleman for West Woolwich (Sir K. Wood) or the hon. Member for Leith (Mr. E. Brown). If the right hon. Gentleman had looked through all the precedents I think he would have found a good many which do not support what he has described as an old custom. I remember occasions when the House sat late upon the day of Adjournment, and I also remember a good many occasions when it rose early in the after noon. I have never understood that it was the duty of the Government to keep a House on the day of the Adjournment; that is for hon. Members themselves to do. In regard to the present situation, I do not think I can make things clearer than I have done. We must get the Army and Air Force (Annual) Bill through. We have no desire to curtail Debate, neither have we any desire to keep the House, and I repeat that the hour at which the House rises is in the hands of the House.

Commander Sir BOLTON EYRES MONSELL: I should like to reinforce what my right hon. Friend the Member for West Woolwich (Sir K. Wood) has said about this Motion. In 1923, it was moved by my right hon. Friend the Member for Bewdley (Mr. S. Baldwin), the present, Leader of the Opposition, when he was Prime Minister, and was agreed to by the whole House of Commons. It then took this form:
That this House do meet To-morrow at Eleven of the Clock; that no questions shall be taken after Twelve of the Clock; and that at Five of the Clock Mr. speaker shall adjourn the House without Question put."—[OFFICIAL REPORT, 1St August, 1923; col. 1487, Vol. 167.]
The form of that Motion was brought about largely through the work of two well-known and pertinacious Liberal Members, Mr. Hogg and Mr. Pringle. Since then it has been the usual custom to move it in that form—there has hardly been an exception—and it has been regarded as laying upon the Government an obligation to keep a House. I suggest as a compromise, if the right hon. Gentleman the Leader of the House would consider it, that we should follow the precedent that the Government themselves created in 1924. In that case there was great urgency to obtain the passage of the Housing Bill before the Summer Recess, and the Motion was then put in the usual form, but with the addition of these words
That Mr. Speaker shall not adjourn the House until he shall have, reported the Royal Assent to the Acts which have been agreed upon by both Houses; but that, subject to this condition, Mr. Speaker, at Five of the Clock, shall adjourn the House without Question put."—[OFFICIA REPORT, 6th August, 1924, col. 2940, Vol. 176.]
I suggest that we might make an Amendment on those lines now.

HON. MEMBERS: Move it!

Sir B. EYRES MONSELL: I beg to move, at the end of the Question, to add the words:
that Mr. Speaker shall not adjourn the House till he shall have reported the Royal Assent to the Acts which have been agreed upon by both Houses; but that, subject to this condition, Mr. Speaker, at Five of the Clock, shall adjourn the House without Question put.

Mr. SNOWDEN: I thank the right hon. Gentleman for the support he has given me in the point I made just now. He has pointed out that the custom of
fixing the hour in the Motion is quite a recent one. I do not object to the compromise that the right hon. Gentleman has suggested. As I have said more than once, all we are anxious to do is to ensure the passage of the Army and Air Force (Annual) Bill. If the House is willing that words such as he has proposed should be added to the Motion, I have no objection.

Mr. ANNESLEY SOMERVILLE: When will the Bill which has been referred to by the right hon. Gentleman be taken?

Mr. SNOWDEN: To-night, after the close of the Debate.
Amendment agreed to.

Resolved,
That this House do meet To-morrow, at Eleven of the Clock; that no questions shall be taken after Twelve of the Clock; that Mr. Speaker shall not adjourn the House till he shall have reported the Royal Assent to the Acts which have been agreed upon by both Houses; but that, subject to this condition, Mr. Speaker, at Five of the Clock, shall adjourn the House without Question put.

Ordered,
That the proceedings on Government business be exempted, at this day's sitting, from the provisions of the Standing Order (Sittings of the House)."—[Mr. P. Snowden.]

BILLS REPORTED.

BRISTOL CORPORATION (No. 2) BILL.

Reported, with Amendments [Title amended], from the Local Legislation Commitee (Section A); Report to lie upon the Table, and to be printed.

MANCHESTER EXTENSION BILL.

Reported, with Amendments; Report to lie upon the Table, and to be printed.

HOURS OF INDUSTRIAL EMPLOYMENT BILL.

"to regulate the hours of work in industrial undertakings," presented by Miss Bondfield; supported by Mr. William Graham, Mr. Attorney-General, and Mr. Lawson; to be read a Second time upon Tuesday, 29th April, and to be printed. [Bill 173.]

Orders of the Day — WAYS AND MEANS.

Considered in Committee. [Progress, 15th April.]

[Mr. ROBERT YOUNG in the Chair.]

AMENDMENT OF LAW.

Question again proposed:
That it is expedient to amend the law relating to the National Debt, Customs and Inland Revenue (including Excise) and to make further provision in connection with finance.

Dr. BURGIN: When the Committee adjourned last evening, I was calling attention to a certain point in connection with the Motion which seemed to me to be worthy of some further consideration. I was calling the attention of the Committee to the taxation of the foreign principal. May I make the observation that the Chancellor of the Exchequer, guided as he is in these matters by a very able panel of experts, might do well to consider the reverse side of this question. While we are anxious that any foreign principal who trades through an English agent should bear and pay his proper proportion of Income Tax on trade carried out in this country, the Chancellor of the Exchequer might also bear in mind that there are certain English subjects who have foreign possessions who do not yet appear to fully bear their share of the Income Tax. When we are considering the question of the foreign principal, we should also consider whether the net is cast wide enough to include those British subjects, some of whose funds are invested abroad.
When the Adjournment took place I was putting a question to the Chancellor of the Exchequer as to the meaning of the word "company" dealing with Estate Duty in cases where a deceased person had transferred property to a company during his lifetime. The question I put was whether a company in that case means a British company incorporated under our Companies Acts, or whether it includes a corporation incorporated under the laws of somewhere other than the laws of the United Kingdom. I think that is a very relevant inquiry. I may remind the Committee that in the Companies Acts the word "company"
means a British company. Here we use the word "company" and say that, if a deceased person has in his lifetime transferred property to a company, certain results shall follow. It is most material to subsequent discussions that we should know whether that includes a foreign corporation. I trust that when the Chancellor of the Exchequer replies he will give us some information on that point.
I would like the Committee to realise the retrospective nature of some of these Resolutions. We are all familiar with the fact that when a Financial Resolution comes into force it has the same effect as an Act of Parliament. When you have a resolution which commences with the words
if a deceased person has in his lifetime
it would appear that any person who is not a deceased person would come within that Resolution. The words, if he has
directly or indirectly transferred property to a company,
would mean at any past period of time. I am not raising any objection to this proposal, but I am simply asking for information. Let the Committee clearly understand what is proposed. It is proposed that:
If a deceased person has in his lifetime directly or indirectly transferred property to a company, and has in his lifetime received, directly or indirectly, benefits of any kind from that company, a sum representing the assets of that company at the date of his death, or a proportion of those assets shall for the purpose of the enactments relating to Estate Duty be deemed to pass on his death.
It is unusual to pass retrospective legislation of this kind, but, if I rightly understand the meaning and purport of this Resolution, it means that if a person at any time during his lifetime transfers property to a company, then this Financial Resolution will operate and a tax will become leviable on the estate of the company to the extent of such proportion as he has enjoyed. I want the Committee clearly to understand what this Resolution covers. I think it is intended to cover the whole series of transfers which have already been made. Where a man has formed a company he comes within the terms of this Financial Resolution. I think that point ought to be made quite clear, because it seems to include everything that happens in the lifetime of any living person.
With regard to premiums on life insurance policies, the 22nd June, 1916, has been selected, and any policy taken out after that date comes within certain conditions. I have looked up the biographies of most of the Members of the Front Government Bench in order to see whether the birthday of any particular Member of the Government falls upon that day, but I have not been able to find any significant fact to determine that date. I should like to have some information in regard to this point, because the 22nd June, 1916, seems to be a long time ago; it was in the middle of the War, and I imagine that the population of these islands was at that time engaged on far more important matters than thinking about life insurance contracts.
It may be said that the observations I am making deal more with matters of detail than with the Budget proposals in general. That is perfectly true, and I am the first to recognise that there will be a better opportunity of examining these proposals word for word when the Finance Bill is introduced. All I want to say is that it seems to me wise that these matters should be discussed at as early a date as possible.
I have only one final word to say on the Budget as a whole. I for one would not dissent from the declared view of the Colwyn Committee that money raised by direct taxation does not enter into the cost of industry; but whether or not the Income Tax is a charge on industry is much more a question of words than of fact. The point which, of course, the Chancellor of the Exchequer fully appreciates is that Income Tax has to be paid in cash to the collector, and the tax is paid out of a fund which would otherwise be available for increased wage 4.0 p.m. commitments, for factory extension and for working capital, and the amount by which book debts must be prematurely collected or stock must be prematurely sold in order to provide sufficient liquid resources on the 1st January or the 1st July. Whether you call it a charge on industry or not matters little. The point is that it has to be paid in cash, and to some extent needs working capital. All that I ask the
Chancellor of the Exchequer to bear in mind is that in these days, besides arithmetic, there is psychology, and the fact that we have to provide in industry a greater sum in working capital twice half-yearly to meet increased Income Tax not, in the strict language of the Colwyn Committee, by a direct charge on industry at all, but a payment of such a character that it tends to restrict the legitimate trade activities of those who are not so venturesome as the right hon. Gentleman.

Mr. OLIVER STANLEY: The Committee naturally listened with the greatest attention to the Budget speech of the right hon. Gentleman last Monday. As far as the manner of the right hon. Gentleman was concerned, I am sure that it met with the approved of everybody on this side. It seemed, rather surprisingly, to lack that slight touch of acerbity which is occasionally noticeable in his addresses to the House, but, as far as the matter was concerned, some, I think, among my hon. Friends on this side were divided between disagreement with his arguments and admiration for his audacity. The speaker, the theme, the circumstances: in the phrase of a great Parliamentarian of this House, what a felicitous combination! The speaker, the right hon. Gentleman, a Socialist Chancellor of the Exchequer, but still the Mrs. Grundy of modern finance, a man for whom the City reserves its choicest turtles, a man to whom the stout broker pours out a libation, and to whom the shrewd banker burns a nightly note. Had we been talking in 1920 instead of 1930, had we been reading some of the speeches the right hon. Gentleman used to make in the country on finance in those days, instead of the speeches he now makes to Chambers of Commerce, opinion in the City would have been rather different
Still, the City is ever ready with its veal, and to-day the right hon. Gentleman is a pillar in the Temple of Mammon. The subject—the toast of "Financial Purity," coupled with the name of the right hon. Gentleman—proposed by himself in a speech which, 40 years ago, would have met with the full approval of Mr. Gladstone, and to-day would ensure the right hon. Gentleman an important posi-
tion in any one of our more old-fashioned financial institutions, a denunciation of the combination of opportunism and optimism which, according to the critics, distinguished the finance of my right hon. Friend, a plea for the utmost rigidity, for the utmost economy, for the utmost adherence to all the Victorian tenets of finance. As the right hon. Gentleman spoke, you could almost hear the rattle of his phylacteries; you could almost hear the rustle as he pulled his broad-hemmed garment round him. You could see in his face then, as you can see now, a silent prayer of thanksgiving to the Deity that he was not as some right hon. Gentlemen opposite him were.
Not on a Motion to urge economy upon this country or a Budget announcing large reductions in expenditure, large reliefs in the burden of the taxpayer, but a Budget speech in which the right hon. Gentleman made himself responsible for £19,000,000 a year added to the taxpayers of this country, was the occasion which the right hon. Gentleman chose for this lecture to my right hon. Friend, to the House and to the country on the proper methods of national housekeeping. He has added £19,000,000, of which about only 5 per cent, can be said to be productive expenditure. On what has he spent it? Some millions have gone on the Widows' Pensions Bill, a Bill to reduce the anomalies among widows' pensions, a Bill which has only succeeded in increasing them, a Bill which took no account whatever of the needs of those to whom the money was given. More millions have gone on the restoration of the financial purity of the Unemployment Fund to do away with what the right hon. Gentleman has described as the humbug and hyprocisy of the borrowing for the Unemployment Fund.
Hardly had the right hon. Gentleman ceased to assert that he ne'er would borrow again, when he was in the House of Commons asking for leave to borrow another £10,000,000, and to perpetuate and increase the financial policy which he had already denounced; then, more millions to benefit the Unemployment Fund, part of these in extra benefits as a little sugar for the poor birds on the higher perches, but even more in benefits which the right hon. Gentleman and his colleagues did not propose to the House, but which, if rumour is true, the right
hon. Gentleman and his colleagues opposed in the secret conclaves of their hearts, and which, if officially given, were not because the expenditure was necessary, useful or beneficial, but because it was essential to preserve the unity of their party. If anybody is going to throw a stone at my right hon. Friend, it needs a great deal of audacity for the right hon. Gentleman opposite to be the first. A lot of bouquets have been thrown at the right hon. Gentleman. The right hon. Gentleman below the Gangway described his speech as an honest speech. Somebody else on those benches described it as having Gothic simplicity. I understand that the Goths were a very simple and single-minded people.
The right hon. Gentleman has had a good deal of praise for the rigidity of his finance, but it raises the question of what we really want in our Chancellor of the Exchequer, what we really consider good finance on his part. What are the qualities which really make one a great Chancellor? Is all that we want of a Chancellor, that one of his officials should lay before him a statement of expenditure, that another should lay before him the result of the last revenue, with £1,000,000 added to each of the yields of taxation as the estimate for next year, and then to cast a balance of the two, take the nearest 6d. in the Income Tax, add the rest out of Super-tax and make up the deficit like that? If that is all we require of a Chancellor of the Exchequer in this country, it is a job that could be perfectly well done by the assistant cashier in any branch of a bank. Is the finance of the Chancellor of the Exchequer really to be judged by his adherence to the strict rules of bookkeeping, or should his object be to try to manage the finance of the country not merely in accordance with rules laid down long ago, but to try, as far as possible, to serve the immediate needs and present requirements of the trade and industry of this country? That, at least, my right hon. Friend the late Chancellor of the Exchequer attempted to do. It may be that he failed, but it may be, too, that the failure was due to no fault of his, and he succeeded, at any rate, in making some attempt to fit his financial policy to the needs of industry, to take a long view and to avoid what he considered a disadvantageous burden, even
if that burden were strictly required by the canons of Victorian finance.
What will be the effect of this Budget upon the trade and industry of the country? The Resolution and the Finance Bill which will follow it will become, during the next few months, a familiar, and, to some of us, not a particularly valued friend. Therefore, I do not intend this afternoon to go into the details of the provisions of the right hon. Gentleman's Budget, but they fall under three main heads in which, I think, can be traced the effect of this Budget upon the trade of the country. One, of course, is the larger imposition of direct taxation. The second is the fiscal part of the proposals, and the third is summed up in this Budget in the Debt charges. First of all, with regard to the larger imposition of direct taxation in this Budget. It raises, of course, the whole controversy, which was summed up so well, I think, by Sir Josiah Stamp as the conflict between wealth as a social irritant, and wealth as an incentive to production. There are two perfectly distinct and both perfectly logical schools of thought. We on these benches believe that wealth is a necessary incentive to production, that the stimulus which is given to enterprise and the accumulations it provides for capital are a necessary condition of our industrial position. We recognise that inequalities are produced, but we say that those inequalities are outweighed by the absolute necessity of an incentive for production.
There are some on the benches opposite who, agreeing with the hon. Member for Bridgeton (Mr. Maxton), do not believe only in wealth as a social irritant; they do not agree that it is an incentive to production at all. They believe, in fact, that it is a hindrance. They take up, therefore, the perfectly logical attitude that national taxation should be used as a method of distributing wealth as quickly and as equally as possible. It is a theory with which one may not agree. We want, for instance, to know when it is going to work. The provision for social services through taxation and rates has risen already from £60,000,000 or £70,000,000 before the War to £400,000,000 to-day. The distribution of that £400,000,000 so far has not effected the ends which some hon. Members
believe it will. Is it the next £50,000,000 or the next £100,000,000 which ii going to bring that long delayed solution? At least, there are those two schools of thought, and I think that we are entitled to know to which of them the Chancellor of the Exchequer belongs, because he seems to me at the moment to be suspended in mid-air between the rather nebulous heaven of hon. Members on that side, and the rather material earth of hon. Members on this side. That is a position of such discomfort that a man more practised than the right hon. Gentleman in having a foot in both camps would hardly be able to effect such a stratagem.
We are entitled to ask him, and to demand an answer, whether he does think that direct taxation has any harmful effect upon the trade of this country at all? If he does not, if he believes that direct taxation does no harm to industry, I do not see that in logic he has any answer at all to the hon. Member for Bridgeton and his friends. If the increase of taxation, if, in fact, the redistribution of wealth does no harm to trade, does not hinder production and will not bring any of the consequences to those employed in industry which we believe it will, what answer Mil the right hon. Gentleman in sincerity make to the demand of hon. Members on those benches that taxation should be used as an instrument to bring about that object?
If, on the other hand, he as from some passages in his speech last Monday I think he must, that, he believes that direct taxation does have some harmful effect on industry, then we say that he should stand honestly by that view, that he should not be afraid to announce it in public, and that, although it may be too late to-day, although all the damage contained in this Budget may already have been done, at any rate in the future, when the House comes to discuss expenditure, it may know, on the authority of the right hon. Gentleman, that there is not, as some people believe, an inexhaustible pool of wealth from which this expenditure can be drawn without doing any harm to anyone except the unfortunate, or, perhaps, fortunate, few who actually have to pay the taxation.
I do not want to labour the point, which has been stressed by many
speakers, as to the effect which we believe these proposals will have upon industry. The hon. Member for Luton (Dr. Burgin) spoke of the withdrawal of liquid capital from a firm, and the reduction of the amount which a firm can put to reserve, but, beyond that, there is a psychological effect which the Colwyn Committee, expert though they were, could not possibly have attempted to estimate in terms of the cost of production—the effect upon the energy and enterprise of the individual in its acquisition, and the effect of such accumulated capital as a fund for the purposes of industry.
Apart, however, from the general theory, let us consider what is going to be the actual effect of this particular £45,000,000. We must admit that its effect in this particular instance at this particular moment must be purely deflation; it must be solely a further lowering of the price level, and, therefore, a continuation of the trade depression which we are going through now. All the beneficial effects which would come from the expenditure, according to the theories of hon. Members below the Gangway, have already been experienced. The relief has been given to the widows, and the unemployed are already in receipt of the money which we are going to find. Those payments, so far, are being financed by loan, but, when that is passed, and when they are financed out of taxation, it means an actual withdrawal from the consuming power of the people of £5,000,000 every year; and nothing is being added to the consuming power of the people, because the relief for which this money is to pay is already in operation, so that to that extent there must be a direct deflationary effect upon the price level in this country.
I hope that we shall have many subsequent occasions for discussing this subject, because there is one branch of this question of direct taxation—of the taxation of wealth—which has never been fully enough investigated. The right hon. Gentleman prides himself on putting the burden of taxation on the backs of those who are best able to bear it, and, under his Super-tax, Death Duties, and Income Tax, he undoubtedly does do that. But is there not the further step of trying, within that limit, to concentrate the burden of this taxation, not only on the backs of those who are best able to bear it, but on the backs of those whom the
country can best afford to see bearing it? We do not tax wealth according to its acquisition; we do not tax wealth according to its use; we tax it solely according to its possessions; and we tax it in regard to the one thing about wealth which does not matter. The importance of wealth lies in the way in which it is acquired and in the way in which it is spent, and of these two aspects the taxation proposals of this country take no heed whatsoever. One man may acquire his wealth in a way that is obviously and demonstrably advantageous to the industry of the country, and another may acquire his wealth in a way which obviously is to the detriment of its trade, and yet both of these two people would pay taxation on exactly the same scale. Similarly, a man, when he has the wealth, may save it, or may spend it on purposes of great social or industrial advantage; or, on the other hand, he may waste it extravagantly in purely luxury expenditure; and yet he pays exactly the same amount of taxation however he spends it.
I am not satisfied that in this country we have yet got to the end of the possibility of some kind of sumptuary law, some kind of taxation which may make the burden greater or less according to the way in which the money is spent. This subject is not one that we can discuss this afternoon, but I remember some weeks ago mentioning the matter to one of my hon. Friends opposite, and he said, "Have you considered what they are doing in Vienna to-day?" The way in which in Vienna they are attempting to tax the expenditure and not the possession of wealth is an interesting study, not only for Members of this House, but even for such an exalted financier as the right hon. Gentleman.
Let me pass to the second way in which this Budget affects the trade and industry of this country, namely, the way in which it touches the tariff arrangements which are at present in force. There is one fact for which hon. Members on this side have some cause to be grateful. They are grateful that, if the right hon. Gentleman's spirit was willing, at least his flesh was weak, and that, whether from design or accident, he has been forced to pursue a policy of courageous and ruthless destruction of the motes, but an attitude merely of respectful hostility to the beams. He has destroyed the Safeguarding Duties,
but he has retained the McKenna Duties and the Silk Duties. One must be thankful that only a few thousand men are to be thrown out of employment, that only a few millions of British capital are to be wasted, that only a few industries are going to be ruined; while hon. and right hon. Gentlemen below the Gangway, who attach so much importance to these questions, and who see so much danger in these tariff proposals, should be grateful that at least a few of these dangers, although they may be small ones, are going to be removed.
This is a question on which hon. Members on this side, particularly, are entitled to know the attitude of the party below the Gangway. I know that it arises at an awkward moment for them. It is a slack time for international conferences. The Conference for smaller but better navies is over, and the Imperial Conference has not yet begun. But hon. Members on this side recollect with a certain amount of bitterness a few weeks in May of last year. They remember a time when there was a spontaneous uprising throughout the country of men who were willing, no doubt from self-sacrificing motives, to spread the Liberal doctrines throughout the country. We remember how some of those Gentlemen came down to our constituencies—how they came down, perhaps, to rural districts and drew tears from the eyes of the agricultural labourer by telling him that under the McKenna Duties his Chrysler would cost him more; how they made the mouth of his wife water with their tales of the cheapness of German silk stockings. But they went beyond these details, and gave the impression to the people of this country that the amount of Protection which we enjoyed under these duties was a really serious evil to the trade and industry of this country.
Even since the Election, a body of Free Traders in a very respectable part of the world issued a circular in which they pointed out the strange coincidence that British trade has declined since the year 1917, when the McKenna Duties were imposed. They appear to have forgotten the very important fact of the Great War, which may have accounted for some part of the decline. Hon. Members below the Gangway, all through the Election, told the people of this country that these
Duties were a real burden on the trade of the country, and a real menace to our industry, and that they would use all their powers to obtain an immediate repeal of these Duties. Are they going to do that? Are they going to live up to what they said last May, or are they going to say, in the words of Shakespeare—the earlier one—that it was:
a tale Told by an idiot, full of sound and fury, Signifying nothing.
I now come to the third way in which the right hon. Gentleman's proposals, and his whole financial conduct during the past few months, have affected, and will affect, our trade and industry. That is with regard to the whole debt policy of this country. In the first place, I regard this Budget as a purely deflationary Budget, and as a further, and perhaps final, step upon the road that we have been travelling for the last five or six years—as an addition to that burden which a too rigid adherence to the policy of deflation and of the gold standard has imposed upon industry in this country. The direct taxation, as I have already said, is deflation. There is also the £5,000,000 which the right hon. Gentleman is going to add to the Sinking Fund. That £5,000,000 can be regarded as nothing but a gesture, as nothing but an attempt to make people believe that in fact he is increasing the Sinking Fund, because, only a week before he put this £5,000,000 back into the Sinking Fund, he came down to the House of Commons to borrow £10,000,000 for unemployment. He has increased his borrowing power to that extent, and he is exercising it at the rate of something like £375,000 a week, a rate which no doubt will be increased before very long.
A matter for which the right hon. Gentleman and the Financial Secretary have taken a great deal of credit is the funding of £100,000,000 of Floating Debt. They take credit for that as a great financial achievement, as something for which we may pat ourselves on the back. I am not going to assume that the funding of £100,000,000 of Floating Debt must necessarily be a good thing. Whether it is funded or unfunded, it is still debt, it has still to be paid back, and, when funded, it is no more secure from the call of the lender than are Treasury bills. We knots that Treasury Bills are renewed automatically every
three months, and that they form such a big proportion of our bill market that there is never any question of not being able to get them. At the same time, they are dear. For the last five or six years, except for a period which can be measured certainly in months, almost in weeks, the rate at which you have been able to borrow on Treasury bills has been lower than the rate of any conversion scheme that we have seen.
What are the advantages and disadvantages of the particular operation that the right hon. Gentleman has carried through? Take the disadvantages first. They are, first of all, the addition that has been made to the Debt charge. The £100,000,000 that was floated was funded at a yield of something between 4¾ per cent. and 5 per cent.—a good deal of it at or slightly over 5 per cent. It is difficult to judge exactly at what rate the right hon. Gentleman is estimating that that £100,000,000 would have been carried as part of the Floating Debt. With his usual courtesy, when my right hon. Friend asked him yesterday, he said, "Work it out for yourself. It is quite easy." The right hon. Gentleman must be a great mathematician if it is easy. I have not found anyone yet who could do a simple sum of division when there are two unknown factors. In this case, although we know what the right hon. Gentleman estimates as the amount he has to spend on Treasury bills, we do not know either the rates which he estimates he Is going to pay or the amount of Treasury bills that he estimates he is going to pay for. I reckon that he will have estimated for something rather more than the present amount of the Floating Debt, and I make the sum come out at something like 3¼ per cent. as his estimate for the cost of the Treasury bills. That is to say, there will be a loss of at least 1½ per cent. on the £100,000,000 which he has funded, and £1,500,000 added to our Debt charge.
Then there is the double effect which this funding of the Floating Debt has had on the international money market. It has had two results. You have taken £100,000,000 out of the bill market and, therefore, you have had greatly increased competition for the bills. The bill rate has dropped to a very low rate, and immediately you attract borrowers from abroad who want to finance their bills in our market. Conversely, to keep pace
with the bill rate, the Bank rate has come down to the low figure of 3½ per cent. It presents no attraction to the foreign depositor, who withdraws his deposits, and you have a double strain upon our sterling. As a matter of fact, in the last few days sterling has been particularly weak. Thirdly, you have had to try to keep a proper ratio between the bill rate and the Bank rate, to try to prevent the Bank rate from falling lower than you intended. The only way it could be done was by a restriction of credit. [Interruption.] The right hon. Gentleman is not a trader. If he was a trader and had been applying for accommodation in the last few months, he would have had some idea that there was a restriction of credit.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): Are you a trader?

Mr. STANLEY: I am engaged in business—[Interruption]. The right hon. Gentleman, with his usual courtesy, says "guinea pig."

Mr. CHURCHILL: On a point of Order. I wish to know whether it is in order for the Chancellor of the Exchequer to apply to the hon. Gentleman who is addressing the Committee a term which is not only opprobrious and insulting, but which conveys a definite personal aspersion.

The CHAIRMAN: I may be under some misapprehension, but I did not understand the words used to apply to a particular individual, but to some sort, of business arrangement.

Mr. CHURCHILL: If the Chancellor of the Exchequer says he was speaking, not of an individual, but generally of a class, the Committee would be in a different position from what it is now. We distinctly heard the term "guinea pig" applied—[Interruptions]. I say "we," meaning my friends on this side of the House. [Interruption.]

The CHAIRMAN: This is a point of Order. I must ask hon. Members to allow the right hon. Gentleman to proceed.

Mr. CHURCHILL: I must ask for your Ruling, Sir, on the use of this most offensive and defamatory statement applied to an individual Member of the Committee.

The CHAIRMAN: Again, I can only say that I understood the words were applied to some sort of business connection and not to an individual. If they bad been applied to an individual, they would be out of order.

HON. MEMBERS: Withdraw!

Mr. STANLEY: The last thing I should expect of the right hon. Gentleman would be to withdraw anything.

Mr. HAMMERSLEY: On a point of Order. You have ruled, Sir, that a particular phrase is out of order. Is it within the competence of any person in any part of the House to go against your Ruling, and, in view of the fact that the phrase referred to has been ruled out of order, should it or should it not be withdrawn?

The CHAIRMAN: The hon. Member must not misconstrue my words, at any rate. I said that I understood the words used were not applied to an individual as such, but to some sort of business arrangement, and that, if they were applied to an individual, they would be out of order.

Mr. CHURCHILL: May I ask whether the Chancellor of the Exchequer will inform us whether the remark was of general application?

The CHAIRMAN: Mr. Stanley.

Mr. CHURCHILL: Then I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

The CHAIRMAN: I have said that I did not understand that the words were used as applying to an individual Member of the House. I am in the Chair, and I was paying attention to what was being said. I am giving my impression of what occurred. I have given my Ruling, and I do not think I am entitled to accent a Motion to report Progress.

Mr. STANLEY: I am glad to be allowed to resume my speech, largely because I know that among my friends anything the right hon. Gentleman may say about me will leave them completely unmoved. I have made a certain number of friends among hon. Members opposite, and they, too, will be unaffected by the taunts which the right hon. Gentleman, in his position of Leader of the House and as a Parliamentarian of great
experience, has seen fit to throw at an inexperienced back bencher.
I was dealing with the disadvantages of the right hon. Gentleman's policy with regard to the Funded Debt. Now for a word with regard to the advantages. The right hon. Gentleman, speaking last night, took a great deal of credit for the cheapness of money, which he attributed in a large degree to this policy, but the cheapness of money in the City to-day is largely artificial. Money is not cheap because it is plentiful. It is cheap because there are very few demands upon it by industry, and those demands that are actually being made are being artificially kept down. The only advantage of this policy is to prepare the ground for a great conversion scheme. Only that would justify the disadvantages which this policy has entailed. We do not know whether the right hon. Gentleman proposes to do it. We hope, if he does, that it will be successful and that the taxpayers will be relieved of a part of the burden of the Debt charge, but I would remind him that successful deflation depends much more on the possibility of the accumulation of capital. which will make money really cheap, and on real confidence in the future of trade and confidence in the Government of the country than it does on any juggling, however clever, with money rates in the City of London.
Thanks to the right hon. Gentleman, thanks to his doctrinaire adherence to his fiscal views, thanks to his inability to stem the extravagance of his supporters, and thanks to the pleasure with which he endures the fullest pains and penalties of his most painful crucifixion upon this cross of gold. we shall see what result this Budget has on the trade and industry of the country. The right hon. Gentleman has been collecting the accounts for the last 10 months. To-day, and in subsequent weeks, we are called on to pay them. The point we are at here is only the signing of the cheque. When in the months to come, the country looks at its pass book, at the record of the unemployed, at the monthly figures of trade and industry, at will get some idea of the heavy price it has had to pay for its fortune in possessing the right hon. Gentleman as Chancellor of the Exchequer.

Mr. LLOYD GEORGE: The hon. Gentleman has made, as usual, a very thoughtful and original contribution to our Debates, and I am sure everyone who has beard him will feel that, although I do not accept his point of view, by that speech he has sustained the reputation that he has won in the House by a series of very admirable speeches. I did not quite follow him when he taunted the Chancellor of the Exchequer with dropping some of the Safeguarding Duties. After all, those Duties were coming to an end, I understand, in the summer of this year—in the dog days. It was in contemplation by the Conservative Government that they should not extend beyond five years, and you can hardly taunt a Labour Chancellor of the Exchequer for carrying out an Act of Parliament enacted by a Conservative Administration.
May I also point out to the hon. Gentleman that, when the Safeguarding Duties were first introduced, they were introduced, whether rightly or wrongly, purely as a temporary measure and that his leader, in introducing the Measure, said, "If an industry cannot establish itself in five years, it is not worthy of support." That was a reference to another set of industries. So the right hon. Gentleman, in dropping these Duties, is simply carrying out the arrangement which the Conservative Administration itself had made. I thought it was unfair upon the Chancellor of the Exchequer when he charged him with crucifying this country on the cross of gold. I think that the gentleman who had the honour of hammering the nails into the cross of gold sits right in front of the hon. Gentleman there. Undoubtedly, it had a very disastrous effect upon the exporting industries of this country.
Before I come to the Budget as a whole, I may be permitted to make one or two criticisms upon it. First of all, I should have liked the Chancellor of the Exchequer to have put a little more on the brewers. I think that they could have stood it. In 1913 their profits were £9,000,000. Their profits last year were nearer £25,000,000. The trade has gone clown in quantity. [An HON. MEMBER: "And in quality."] I am very much obliged; and undoubtedly in quality. There has been a good deal of what used to be known as dilution, but the brewers have prospered as a result. I remember
that there used to be a good deal of discussion about extracting gold out of sea water. The brewers have succeeded in extracting a good deal of gold out of fresh water. Their profits have increased from £9,000,000 to £25,000,000, and I think that the Chancellor of the Exchequer could easily have taken a larger share of that £25,000,000 without passing it on in the least to the consumer.
The second suggestion of criticism which I have to make is that I regret very much that the Valuation Bill is not in the Budget. There are a great many perils which beset its path which might have been averted. I am speaking here from some sort of bitter experience of an attempt at establishing a valuation. If it had not been that that valuation was in the Budget it would never have gone through at all. In addition to that, at that time, owing to pressure in the House of Commons, a great many reservations, modifications, and exceptions were made which rendered even that valuation very largely futile for taxing purposes. We have learnt by experience that the only way to make a valuation of that kind effective for taxing purposes is to make it as simple and direct as possible. I hope that the Chancellor of the Exchequer will bear that in mind in drafting the Bill, and that he will read the Budget of 1909–10 in order to know what to avoid.
But he has this advantage over me to-day, that that Budget did establish a complete valuation of the whole of the land of this country. I think that it was brought more or less up-to-date in 1923, subject to some very shattering decisions of the Courts which we could not rectify because of the War, and which suspended the operation of the readjustment that was necessary in order to make an accurate valuation. But the value of the site itself is established—the gross value and the value after deducting the value of the buildings—so that all that the right hon. Gentleman has to do is to bring it more or less up-to-date. I have no doubt at all that he must make certain improvements which experience will have taught him, the Treasury, and the Valuation Department how to effect. At any rate, I very much regret that it has not been included in the Budget. Then there would have been a guarantee that it would have gone through. I quite understand that he
could not have done so without imposing at least some kind of nominal duty or tax. That could at least have been done, and then valuation would have been established, and you could have decided next year whether you are going to leave taxation to the localities or to the national Exchequer, or to a combination of both. I am very apprehensive as to the fate of the Bill which is to be introduced and carried through as a separate Measure. Those are the two criticisms which I pass upon the Budget.
With regard to the Budget as a whole, I think that it is a straightforward Budget. It is on what I call simple, straight lines. I have listened to a good deal of the criticism upon it, including the very able criticism delivered by the hon. Member for Westmorland (Mr. O. Stanley), and the substance of the complaint against it is that it is a tax on industry. All taxation must be a tax upon industry.

Mr. MacLAREN: All except one.

Mr. LLOYD GEORGE: I know where my hon. Friend means. It goes like an arrow. He means land values. Although the Colwyn Committee decided that the Income Tax and other taxes should not be regarded as a tax on industry, I agree with my hon. Friend who sits behind here that in the main it does drain industry of the resources which ought to be made available for development. The higher you put the taxation, you are bound undoubtedly to affect industry in this country. But I want to point out that it is not the taxation that matters; it is the expenditure. We are always talking about taxation and objecting to taxation. If we are committed to expenditure, there are only two ways of meeting it. The first is by paying it out of current revenue and the second is by borrowing, and the second is much more injurious. If we are committed to the expenditure, we have to face it. The Chancellor of the Exchequer is not to be blamed for the fact that, having been confronted with a large deficit—I will come later on as to how it was created—he faced it like a man and decided to pay his way as he went along. Let us examine how it was started. I should have thought that the last man in this House who had a right to complain of the burden on industry was the
right hon. Gentleman the late Chancellor of the Exchequer. He is responsible for most of this deficit. I pointed it out at the time, and I will show that in the action that he took then he started a precedent, which is entirely his own and which, I hope, will never be followed, of bequeathing deliberately a deficit to a successor.
The right hon. Gentleman turned round on the benches here and rather complained that the gangway between us was very much broader than was when he referred to it last year. Whose fault is that? The right hon. Gentleman has been lured away by buccaneers. The gangway has been pulled up and a plank has been substituted, and his new companions in this adventure have made it quite clear to him that unless he signs the articles he will have to walk the plank. So he decided to join up, and he is now one of the crew. I thought that that little outburst of his about Protection was rather irrelevant to his argument in the arrangement of his speech, and I wondered why he put it in. It was a preliminary flourish of the cutlass, just to say: "I am all right." When he looked at me and my friends like this and said that there was a blur and he could not see, I thought that that was due to the atmospheric conditions in the quarter of the sea in which he is sailing. Things are not very clear there. You read letters and articles, and speeches delivered at Nottingham and elsewhere, and visibility is very low. Lord Beaverbrook has been sounding very loudly and very peremptorily the foghorn to avoid a collision between perfectly friendly craft. If the right hon. Gentleman will just come away from there his vision will clear, the blur will disappear, the gangway will still be narrow, and we shall welcome him to repeat those formidable speeches which he used to make against Protection in the old days and in favour of direct taxation.
The right hon. Gentleman. said that he was not responsible for this deficit. It would have been all right this year if there had been no more expenditure, and also if the Chancellor of the Exchequer had not made the mistake of paying his predecessor's debts he would have been all right. The right hon. Gentleman must not be jealous. No more expendi-
ture by anybody except himself! He can, to use a phrase in his speech, "bribe and delude the voters" with £30,000,000 a year, but no one else must dare to follow his example. He is responsible for most of this deficit. No doubt the Minister of Labour was lured to follow his bad example and added something to it, but the right hon. Gentleman broke into the safe first. She is only picking up what is left. And he is united in burglarious matrimony with the Minister of Labour on this matter. He is mainly responsible for the difficulty. He may have said, "This 5.0 p.m. year he will get through, but next year he cannot." The Chancellor of the Exchequer is absolutely right and in accordance, I think, with the soundest precedents, including my own, in laying down the foundation of taxes which this year will be sufficient to meet a reduced deficit and which will swell next year to such proportions as to enable him to meet a larger deficit. That is very sound finance. What did the right hon. Member for Epping (Mr. Churchill) say? He said, "It is quite true that there will be a deficit for next year, but I think there will be good trade."

Mr. CHURCHILL: That was for 1931.

Mr. LLOYD GEORGE: But the right hon. Gentleman did not provide in the taxation of this country for the expenditure to which he was committing us. I pointed that out repeatedly, and I never got an answer. I asked him to point to a single Chancellor of the Exchequer who had ever done what he did before. It was a deficit that he was arranging for 1931. What was his answer? "I thought there would be good trade." Surely, that was a gamble. He may say, "It is the Socialist Government that is to blame." He knows that is not fair. Bad trade extends over the whole world at the present time. I am not in the least satisfied with what the Government are doing to meet unemployment, but I have never held them responsible for bad trade. In America, there are nearly 4,000,000 unemployed. [HON. MEMBERS: "More!"] The American Government itself admits 4,000,000, and others put it as high as 6,000,000. In Germany, there are about 3,000,000 unemployed. It ex-
tends over the whole world. Here we have special causes, owing to the great Hatry collapse, the condition of the New York market, and other reasons. Therefore, the right hon. Member for Epping was gambling on something which would have turned out badly whether he was in office or somebody else was in office, and he bequeathed for the first time, deliberately, a deficit to his successor.
The right hon. Gentleman added up the benefits that he was giving. I remember some of them. He said that the benefits they were conferring came to £784,000,000, actuarially. If he looks at the deficit that he has created, and if he capitalises it, he will find that it is pretty near £300,000,000, in addition to the £14,000,000 deficit we have to-day. What did he do? He practically said: "Here is my will, and when I depart this life as Chancellor of the Exchequer I bequeath all my gambling debts to my beloved heir, as a token and recognition of the unsparing and unremitting attention which he has paid to my financial administration." The Chancellor of the Exchequer is paying the gambling debts of his predecessor, for the honour of the House, and it is rather hard and, I think, a little discreditable, that he should be taunted for that by the gambler.
It is not taxation that matters, but expenditure, and that you must face either by taxes, or by borrowing, or by doing what the right hon. Gentleman for Epping did, and I am very glad that he has no successor in that respect. There were complaints by the right hon. Member for Epping and they were rather repeated by the hon. Member for Westmorland, that the Government had been piling up all sorts of benefactions. I think that policy is doubtful. I expressed my doubts at the time. I had grave doubts, and I am still of the opinion that it is a great mistake. But the Conservatives have no right to complain. Has the hon. Member for Westmorland ever read the Conservative election literature? It is worth his careful perusal, and I hope he will do it when he has time. It is extraordinarily interesting. I have a specimen of it here. Here is one leaflet, in red—all promises of expenditure; bribery arrayed in
scarlet. This is the party that is criticising the Government for increased expenditure, not the right hon. Gentle-
man, because I know he put up a fight, and it would have been much worse but for him. He put up the best fight that he could, and he is not responsible for the increase. Just look at the gentlemen who criticise, and who, if this leaflet had been accepted by the electors, would have now been carrying out their policy. Of what did they boast?
In 1928, the Conservative Government spent £1,000,000 more on education, £3,000,000 more on housing, £1,000,000 more on health services, and £13,000,000 more on pensions than the Socialist Government spent in 1924.
Let us have the next. [HON. MEMBERS: "What colour?"] It is still red.
During the lifetime of the present Conservative Government expenditure on social services"—
all the articles criticising this Budget do so because of the increased cost of social services; Conservative papers, Conservative speeches are all the same—
by the state and local authorities increased by £50,000,000, from £332,000,000 in 1924"—
That was the year when the Socialists were in office. They only spent £332,000,000—
to £382,000,000, in 1927.
Three years of Tory Government! Since then, the right hon. Member for Epping has put on another £30,000,000. They boast of it when there are votes to be had. The heading of this leaflet is, "From the Cradle to the Grave." This is how they sum up:
From the time that be is born until his declining years, the worker is protected and helped on his way by the State under Acts of Parliament which were either originally passed by Conservatives or which have been improved upon by Conservative Governments.
[HON. MEMBERS: "Do you agree?"] Well, you cannot have it both ways. You cannot at one moment say that there is expenditure which is corrupting and, that great word "demoralising" the people, and when you come to an election say: "We have done more demoralising and more corrupting than the Socialist Government." I have a list here of all the things that the Conservatives have done, at great expense, all involving taxation. They begin in infancy, then go on to childhood, and middle age—great schemes for improvement at the expense of the State and the taxpayer—and then end on to old age. I must say that I was
amazed to find among the triumphs of the Conservative Government, health and unemployment insurance. I think that is rather steep, even for the hon. Member for Hemel Hempstead (Mr. J. C. Davidson). That is not all. There are a good many other documents here. Here is a Blue Book. It is called "Hints for Conservative Canvassers and Workers." This is the sort of thing that is said—all through there is the sane boastfulness as to how much more they spent than the Socialists:
Dependants' benefit is higher under this Act, which is a Conservative Act, than under any previous Government, including the Socialist Government in 1924.
The Socialist Government ought to be ashamed of themselves, but, stimulated by this literature, they are beginning to wake up. Then there is
£10,800,000 a year given to the farmers, and £26,000,000 given to the industrialists.
There are some very interesting figures in another little book. This book is orange colour. "Two Hundred Fighting Points," it is called. This is the heavy artillery of bombardment, and all of it charged with taxes. There are some remarkable phrases in this little book, and they sound rather odd in the mouths of gentlemen who are talking about taxes being too hard. The quotations refer to social reforms; all of them admirable:
The Conservative Government spent 6s. for every 5s. spent by the Socialist Government.
That mean, curmudgeonly, niggardly Socialist Government! All this has been boasted about. I could give no end of quotations as to what they did. [Interruption.] The hon. Member was one of the worst of them, in his own constituency in saying these things and a good many more. What is the good of coming down to the House of Commons and attacking the Government for raising taxation in order to pay off debts which they inherited from the very gentlemen who criticise them, and even for adding things which they were prepared to do? That is not the way in which it ought to be done. Here, we have another quotation:
Mr. Baldwin"—
This sounds rather reminiscent of a Soviet experiment—
promised to appoint a Committee after the election to consider the cars of children from one to five.
That is going to cost something. Every line of it involves a burden upon industry. The Conservatives taught the lesson and the Labour Government has improved upon it. The right hon. Member for Epping complained that taxation was concentrated upon a small portion of the community. Who set the example? Last year, the right hon. Gentleman took 4d. off the Tea Duty. Is he going to say that there was no bribery in that? Was it done as a great financial Measure, or in contemplation of the election which was about to take place? The right hon. Gentleman also reduced the tax on sugar—I am not complaining about it—but while he was increasing the burdens of the community in every respect he was narrowing the area which was to maintain the burdens. The Chancellor of the Exchequer has gone only a little step further. The late Chancellor of the Exchequer and his friends spent money upon the classes whose support they were anxious to win. The farmers were disgruntled; millions of money had to be spent. The industrialists were sick with their trade policy; they also had to be helped. Whoever has a right to criticise the Government for these things hon. and right hon. Members of the Conservative party have no right.
I agree that all parties should consider whether the time has not come to cry a halt to eleemosynary legislation; and here I want to put in a word, very seriously, as an old Chancellor of the Exchequer. It does not matter how generous or how benevolent a man may be, he has to consider not merely the merits of a case but his means. When an individual case is brought before the House, one feels that there is no answer to it, and no one cares to incur the obloquy of resisting it. It was the same when the right hon. Gentleman took the
4d. off tea. No one with a General Election in front of the country stood up against it. The same thing applies to all these schemes for relief for various sections of the community, but I am quite certain that the time has come when all parties ought to consider the desirability of some check being put upon a natural impulse of procedure. It would be more valuable if this expenditure were utilised for the purposes of developing the resources of the country.
If I have expressed any disappointment with the Budget, it is not because of the Budget itself, but because it reflects, in my judgment, the failure of the Government to seize the fundamental and essential duty of the moment, and that is to take advantage of the bad trade of the country to develop resources which will enrich the nation and put us in a better position to extend our charities later on. This is a straightforward and honest Budget. It has made the country face its responsibilities, but I also ask that the Government should face their responsibilities in view of the great unemployment which exists.

Mr. MARCUS: We have listened to a brilliant speech by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) in which he has exposed the hypocrisy of Conservative criticism of the Budget. It is a profound mistake to assume that it is the duty of the Chancellor of the Exchequer to introduce a Budget which will please not only every Member of this House but also every member of the general community, and least of all is it the duty of a Socialist Chancellor of the Exchequer to attempt to introduce the Budget which will satisfy the Conservative party. His chief function is to present to the House and the country the financial statement, and it is clearly impossible for any Chancellor of the Exchequer in existing circumstances to introduce a new financial system in April of each year. After all, the present Chancellor of the Exchequer, like his predecessor in office, has to realise that he is heir to something which has great momentum. It is not something which can be easily altered; it may be improved, but it is a legacy bequeathed to him, which he must realise no matter how difficult it is for him to do so.
If we face the facts, we are bound to recognise that the present Chancellor of the Exchequer has used every possible opportunity not merely to remove the evils created by his predecessor but also to place the country in a better position in the years that are to come. Two factors are closely connected with the composition of any Budget. In the first place, you have the condition of industry and trade and, in the second place, the temperament of the Chancellor of the Exchequer of the day. The present Chancellor of the Exchequer is noted for a
temperament which expresses that of a saver rather than a taxer. Some hon. Friends of mine consider that this is a wrong attitude for the right hon. Gentleman to take; but I think they must examine that attitude a little more closely than some of my hon. Friends are prepared to do. It all depends on what he attempts to save and upon what he puts taxes. It is conceded even by hon. Members of the Conservative party that inherited wealth must be subjected to very severe taxation. I am glad to see that, so far as large estates are concerned, the rate has been increased from 40 to 50 per cent., but what I cannot understand is that if it is correct and financially defensible for a Chancellor of the Exchequer to impose taxation on inherited wealth on such a vast scale, without any injury being done to the country, why it cannot be done on a far larger scale while the individual is alive.
We hear a good deal of rubbish spoken regarding the danger of heavy taxation to our industrial and social structure. I believe in heavy taxation; but I do not take the view of the hon. Member for Bridgeton (Mr. Maxton) that it is possible within the framework of one Budget, or of several Budgets, in existing industrial conditions to introduce propoals which will give to this country not merely the material for carrying on our administration but also a new system of society. I speak as a Socialist, and I am as anxious as the hon. Member for Bridgeton to have Socialism introduced into this country as early as possible.

Mr. WALLHEAD: He did not say in one year.

Mr. MARCUS: I do not want to do my hon. Friend an injustice because I have great personal regard for him and for his opinions, but I must point out to my hon. Friend and to his followers that we must stick to practical politics. We cannot achieve the impossible. We have to face the facts. In 1928 the former Chancellor of the Exchequer stabilised the Debt and Sinking Fund at some £355,000,000 per annum. It was hoped by that system to put into the Sinking Fund an annual sum of £55,000,000. If we take last year as an example we find that only about £28,000,000 net has been
put into the Sinking Fund. I wish the present Chancellor of the Exchequer had seen his way to depart from the principle of this fixed sum of £355,000,000 but I take it that he has not done so because he is more thoroughly acquainted with the actual facts of the situation than other hon. Members in the Committee. I believe in a vigorous Sinking Fund operation as one method of dealing with our National Debt, and it is a mistake to assume that we can solve our social problems without tackling the National Debt.
We have a National Debt which is now in the region of £8,000,000,000; and we are paying roughly about £1,000,000 per day as interest on that debt. That is a tremendous burden upon industry. The Sinking Fund has been established for the purpose of reducing that amount. Other methods must also be used, and the time is fast approaching—I hope it will materialise during the regime of the present Chancellor of the Exchequer—when the country will make a substantial call upon the large incomes received at present by many people who are able to pay a bigger share of the taxation of the country than they pay at present. That will have to be done if we are to provide the money required for social services, and the sooner it is done the better.

Mr. MACQUISTEN: As a constructive proposal; suppose that a man is paying already 60 per cent. of his income, of a large income, under this system, would the hon. Member suggest anything higher? Would he raise it to 90 per cent.?

Mr. MARCUS: My answer to that is that the amount of taxation must be determined by the needs of the. country. If there are urgent social services which have to be carried out, then I maintain that there is no limit to the amount of taxation where the wealth exists. It is not the taxation alone that you have to consider, but the nature of the expenditure for which the revenue is going to be utilised. If it is the view, as it appears to be rapidly becoming the view of the country, that urgent social services must be carried on, obviously those who have the wealth must be called upon to make a bigger contribution to the revenue of the country. It is, perhaps, forgotten that a few years ago the Leader of the Opposition made a great personal sacri-
five by surrendering to the Treasury a considerable proportion of his War Loan holding, and thus helped to reduce, as far as he could, the extent of the National Debt. It seems to me that it might be worth while for the Chancellor of the Exchequer to consider whether an appeal might not be made by him and by the Prime Minister for an emulation of the example set by the Leader of the Opposition. Some good might arise.
There is a vast difference between every pound paid into the Sinking Fund, and every pound remitted from taxation on the citizens of this country. Every pound paid into the Sinking Fund is a pound liberated for investment in industry, while in many cases a pound which is remitted from the taxation of those who are able to pay is a pound spent on luxury, which does not help the country and therefore is a form of waste. Therefore, I want a more vigorous Sinking Fund policy, which will enable us to tackle the debt more actively than at present; also a voluntary appeal to the nation to realise the financial difficulty of the country; and above all, as time goes on, higher and steeper taxation which will bring in the revenue that is necessary if we are to survive and to tackle urgent social problems.
What is the position of trade to-day? The Report of the Balfour Committee—it is in seven bulky volumes which I do not pretend to have read, but a summary of which I have attempted to read—points out quite clearly that the overseas trade of this country before the War was 14 per cent. of world trade, that now the figure is reduced to 11 per cent., and that unless we make up leeway there will be difficulty in stabilising conditions in this country. That is one difficulty which the country must face. Another factor which we must keep in view, in a discussion of this kind, is the distribution of wealth. So far as I can make out from official and reliable figures, we have an aggregate income in this country of £4,000,000,000 per annum. Only some £1,600,000,000 of that, goes into the pockets of the working classes, and the remainder goes more or less into the pockets of the rentier class. It seems to me that unless the people of this country arrange to challenge that unfair division of the wealth which is produced by the people, we are going to have enormous difficulties, no matter what kind of
Budget is introduced. We must keep in mind the fact that this country has now a burden of debt higher than ever in our history. The debt is something like £8,000,000,000. There is also a local debt of a very substantial character. In England and Wales that debt is £1,000,000,000, and in Scotland the debt of local authorities is £100,000,000.
I find it difficult to understand how the Conservative party can, through their chief spokesman, tell the Committee that the present Budget statement is a departure from the traditions of this House. I wish the statement were true; I wish that the conditions were such that it could have been a departure from the traditions of this House. The ex-Chancellor of the Exchequer, who complains so much of high taxation, imposed more taxation during his period of office than has been imposed by any Chancellor of the Exchequer during a similar period in the last 80 years. I make that statement on the authority of the present Chancellor of the Exchequer. Yet the late Chancellor of the Exchequer gets up and tells us that taxation is too high, and that an extra 6d. on the Income Tax will endanger the whole structure of the country. Let us remember that during the War years we had a 6s. Income Tax. This country did not then collapse. There was more prosperity and more employment during the War than there is now. No doubt it was an artificial prosperity, but nevertheless there was more employment. Above all, let us keep in view the fact that we cannot test the real value of taxation unless we attempt to co-relate that taxation with the services to which it is applied. If that be done, I have no doubt whatever that we shall make greater progress. It is suggested by hon. Members opposite that the time has come for a policy of rigid economy. The right hon. Member for Carnarvon Boroughs has completely destroyed that argument.

Major ELLIOT: He stressed it.

Mr. MARCUS: The conception of rigid economy nowadays is largely fantastie and nonsensical and has no relation to facts. It may be that money to-day is cheaper than it has been for some time, but that cheapness is a result of the industrial and trade depression. What we gain at one end is lost at the other, and mere cheapness of money cannot be
used as a plea for the application of a policy of rigid economy. But let us suppose that the policy is a sound one. To what services is it to be applied? On that subject we are entitled to some information from the other side. Is it to be applied to the social services? Is there an hon. Member present who can name to me one social service that could be reduced?

Major ELLIOT: The right hon. Member for Carnarvon Boroughs named all the social services.

Mr. MARCUS: Would any Conservative mention one social service which can reasonably be reduced without injury? Not a single service has been mentioned.

Major SALMON: There was no necessity to increase the doles for unemployment.

Mr. MACQUISTEN: I would say that there could be no more popular measure in this country than one to abolish the National Health Insurance Act.

Mr. MARCUS: The hon. and gallant Gentleman suggests that the dole is now too high, and the hon. and learned Member suggests the abolition of the National Health Insurance Act. So far as the dole is concerned all I can say is that unemployment is not the result of anything done by the unemployed man or woman. If we take Lancashire as an example, we find that it is the introduction of the automatic loom and the progress of rationalisation in practice which have placed 100,000 men and women on the streets in the past three months alone. Is it seriously suggested by the hon. and gallant Member that these men and women ought not to be paid as high a rate as is necessary to enable them to keep themselves and their wives and children in decency and comfort? I am certain that he would not support a policy of that kind. The suggestion that we should abolish the National Health Insurance Act is completely inconsistent with what is understood to be the desire of the whole of the people of this country. What is the purpose of the National Health Insurance Act? It is not "something for nothing," as was implied in the suggestion; it is something for which the working classes themselves
have paid substantially. There are today many contributors to the Fund who have drawn not a single copper from it during 20 years.

Mr. MACQUISTEN: Give them back their money.

Mr. MARCUS: I have not yet heard from any working man in the country that he wants his money returned to him. What he wants is a substantial improvement in the scheme and higher rates of sickness benefit. No, it is not possible to-day to economise on any branch of our social services. Where else is the economy to take place? There is the cost of administration. Would anyone suggest that we can economise there? Administration costs are already comparatively low. So what is to be done? It is true that on unemployment we have paid away in the past few years a sum of £750,000,000 in insurance benefit, and that it has not yielded a single capital asset to this country. But is there any remedy? We are living in the post-War period of great industrial dislocation. Those who told the people of this country that the War was "a war to end war" are the people who are now responsible to the men who have come back, and they must see to it that justice is done.
It is absurd to suggest that men and women who are now unemployed through no fault of their own should receive reduced benefits and be placed on the starvation level. What would be the immediate result? A great increase in disease and sickness in industrial areas would be inevitable. Less food and worse housing conditions would mean worse health and more expenditure of public money on hospitals, infirmaries and so on. I am satisfied that there is not a Conservative Member of the Committee who can get up and show where it is possible to economise without inflicting serious injury on the people of the country. I do not believe that we have reached the limit of taxation. During the War period we incurred debt to the extent of £10,000,000,000 on different forms of destruction, and the country was able to bear the strain of that expenditure. The crisis with which we are faced now is just as great, and it requires just as drastic action. In my judgment, slums and unemployment and poverty generally are just as serious for the
country as the danger to which it was exposed in 1914. We have to face these difficulties and unless we come to realise that a steeper and higher form of taxation is necessary, unless we see that the instrument of taxation is applied more equitably, unless we get the people of this country who are capable of paying to pay their proper share of taxation, it will not be possible in our day to solve the many problems which confront us.

Captain EDEN: The hon. Member for Dundee (Mr. Marcus) has added one more to the many speeches which have expressed some measure of complaint against the speech of the Chancellor of the Exchequer on Monday last. Indeed, as I listened to yesterday's Debate, I began to wonder from what quarter was the right hon. Gentleman going to receive that support which, even the least happy of Chancellors of the Exchequer is in the habit of expecting. This afternoon, as I listened to the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), I knew from where that support was meant to come. We listened to the first eulogy that we have yet heard of this Socialist Budget from the Leader of the Liberal party. It was a most interesting eulogy, because, if the Chancellor of the Exchequer analyses that speech, he will find that he was only praised in it, on condition that he would not be as good next year as he has been this year—good, that is, from the point of view of his own supporters. In effect, the right hon. Gentleman the Member for Carnarvon Boroughs tells him that what he has done this year is not his fault, poor man, because he has inherited from such a spendthrift as my right hon. Friend the Member for Epping (Mr. Churchill). But what is to happen when, instead of inheriting from a so-called spendthrift Conservative Chancellor, he inherits from a Socialist Chancellor? Then, no doubt, the Leader of the Liberal party will have something different to say.
As far as this Committee is concerned, having listened to the speech of the Leader of the Liberal party, I think we are entitled to ask the Chancellor of the Exchequer whether he endorses the view of the Leader of the Liberal party that the time has come when a halt must be called in our expenditure on social services of all kinds. Those are the terms
on which the Leader of the Liberal party held out his undertaking of support, and we ought to be told by the Government whether they accept those terms, or how far they are prepared to accept them, and how far the only Member of this Committee who has up to now spoken favourably on the Budget expresses the views of the author of that Budget? That is not an unreasonable request.
One of my hon. Friends, speaking yesterday, referred to the Chancellor of the Exchequer as having a mind which dated from 1880. I think my hon. Friend was wrong. He was several centuries too forward in his history. I think the Chancellor of the Exchequer has a mediæval mind. He would have made an Admirable Minister, for instance, for the Medici. The thumbscrew, the rack and the stake are all means to an end which the Chancellor of the Exchequer would have understood very well; and he could then have applied them, ruthlessly and happily, in the cause of the fiscal bigotry which he so consistently maintains. I do not know how else we are to understand his attitude to those few Safeguarding Duties which are to lapse in the course of this year. It seems strange to us that, in the 20th century, a Chancellor of the Exchequer, who is so hard pressed to find revenue that he has to raise £40,000,000 of new taxation, should allow to lapse nearly £1,000,000 of taxation which is being collected, as far as we know in a manner which is doing injury to no one in this country. That operation of our Chancellor of the Exchequer is a strange commentary on the 20th century.
Perhaps it is true of the younger Members—certainly the younger Members of our party—that we are merely opportunists in these fiscal matters. I, personally, am prepared to plead guilty to the charge. It seems to me that the only useful test which can be applied in these fiscal controversies, which have no academic interest whatever, is the result which is actually achieved. I am afraid that one of the reasons why the Liberal party is slowly but steadily fading away, is that its attitude on these matters is as mediaeval as the attitude of the Chancellor of the Exchequer. I do not believe that the younger generation in this country, which does not remember the great fiscal controversies of the early days of the century, is in the least in-
terested in enabling the Chancellor of the Exchequer to carry out his fiscal views when those views clearly, in our eyes, are doing injury to British trade and causing suffering and unemployment to British people. We suggest that, on that head, the Chancellor of the Exchequer is deserving of some censure at least from our point of view.
Perhaps I may now refer to one of the very few items in the Budget statement which I was grateful to see there. That is the concession, reluctantly and almost spitefully given by the Chancellor of the Exchequer, that the McKenna Duties should net be repealed this year. I am only sorry that we could not have had that announcement some months ago. I know that the Chancellor can hide himself behind the barrier of precedent; but I think it a pity, since he has departed from precedent in other matters, since he is prepared to be the first Chancellor in post-War years, to increase the burden of direct taxation, that he should not have departed from precedent in this matter also and saved important British industries from the long period of harassing uncertainty which they have had to undergo.
On Thursday last I asked the Minister of Labour for the number of unemployed in Coventry compared with the number at this time last year. The right hon. Lady told me that she was circulating the answer together with other answers to similar questions. I can quite understand why she was not eager to read out those figures to the House, and with the permission of the Committee I propose to quote them now, because I fear they are significant of a state of affairs which some of us in the Midlands know to have been in existence for some time past. On the 21st March, 1930, there were 5,616 on the register in the Coventry Employment Exchange compared with 1,761 at this time last year. That is a sufficiently tragic figure and, putting ordinary party prejudices aside, I do not think that anybody can doubt that, to a large extent, it is due to the fact that our industries in Coventry, which are concerned with motor cars and artificial silk, have been—apart from world conditions of depression—operating under a condition of harassing uncertainty until to-day. That condition
was imposed by the Chancellor of the Exchequer who has to bear a serious measure of responsibility for that additional unemployment in Coventry to-day.
The right hon. Gentleman told us that he was placing the burden of taxation on the shoulders best able to bear it. How does he know? In his Budget statement a Chancellor can arrange the financial burden so that the immediate effect shall fall upon the broader shoulders, as he says, but no Chancellor of the Exchequer can say what the ultimate effect of taxation is going to be, or on whom the indirect burden will, in the end, be heaviest. I have little doubt that the immediate burden is placed on the Income Tax and Super-tax payers, but no taxation burden can be imposed in this or any other country without this result—that the effect of the extra burden percolates through all sections of the community. It is playing with words to suggest that, because you lay the burden on the Super-tax payer, it is he who is going to bear it. Without doubt, others in other sections of the community will bear the burden.

Mr. MacLAREN: Does the hon. and gallant Gentleman imply, by that statement, that the working class ultimately pay all taxation?

Captain EDEN: I maintain that British industry ultimately pays all this taxation, and all those who are concerned with the welfare of British industry—every man and woman in this land—are bound to suffer from the effects of increased taxation. I think that is a reasonable point of view, and if the hon. Member for Burslem (Mr. MacLaren) reads some of the reports of the Trade Union Congress, he will find that they also accept that view. The point which I wish to emphasise is that it is beyond the power of a Chancellor of the Exchequer to direct upon whom the burden shall ultimately fall. One of the effects of the particular manner in which the right hon. Gentleman is adjusting the finances in this instance is that the industry of agriculture will have to carry a specially heavy burden. It is notorious to anyone who has examined our agricultural difficulties that the burden of increased Income Tax or Super-tax, while nominally falling heaviest upon the richer a section of the community, will fall most seriously upon the landed section of the community.
Recently, the Liberal party has disployed a new-found sympathy for the landowners. We cordially welcome that sympathy, but whatever may be the attitude of anyone towards the land owning system in this country, the fact remains that the land owning section of the community is financially less able to meet this additional burden, compared with those who have not to carry such immediate commitments. You are, therefore, placing upon the agricultural community, at a time of admitted depression in the industry, further troubles. That will certainly be one effect of this increased taxation—that there will be further disturbance in land tenure, and further unfortunate consequences to the agricultural community as a whole.
The Financial Secretary, if I understood him aright last night, took some credit on behalf of the Government for the slight improvement in gilt-edged stocks which took place yesterday. I do not think he can have very closely examined what happened yesterday. There was a fall followed by a rally. I wonder why that rally took place? I think if the hon. Gentleman makes inquiries, he will find that certain selected gilt-edged stocks recovered for certain specific reasons, not wholly complimentary to the Budget statement. Five Per Cent. War Loan recovered yesterday, I suspect, because it became the accepted opinion that in consequence of the increased taxation in the Budget, there was no hope of an immediate conversion loan on a large scale. If that be so, then I fear that the effect of the Chancellor's statement is not one on which he can congratulate himself, and I think obviously that was the explanation of that movement.
Last year the Chancellor of the Exchequer, quite rightly, told us that there could be no real easement of taxation burdens in this country unless we could convert part of our debt to a lower rate of interest. Of course, that is so, and one of the strongest criticisms of this Budget is that it will definitely postpone the possibility of converting our debt to a lower rate of interest. Until we can obtain that conversion, the nation will not be in a financial position which will enable us to make any reduction in direct taxation. The right hon. Gentleman is
involving us in a vicious circle; he is piling on direct taxation, and, therefore making it more difficult for himself to carry out a conversion loan, and he is thus steadily postponing the day when we can hope to reduce taxation. Surely he must know that one of the effects of increased taxation is to drive money away from the gilt-edged markets into markets of a more speculative character. That is well known. That is one of the bad results of raising the rate of taxation in this country, and that is one of the reasons why the right hon. Gentleman, by his policy of increased taxation, is postponing the conversion which we should all wish to see.
There is one other matter to which would refer and which I think the Committee can only consider in a Debate of this kind. Are we satisfied with the present relation of our financial and fiscal policy to our industrial need? In the speech of the Chancellor of the Exchequer the word "industry" scarcely had a place. That is, surely, a sufficient criticism of the proposals which we are now considering. Are we satisfied that our financial policy is closely related to
our industrial need, or is it 6.0 p.m. sometimes antagonistic to it, and, if so, how can we expect our industrialists to give of their best to meet the world competition? A short time ago President Hoover was at the Department of Commerce in the United States of America, and while there he initiated a drive throughout the world to capture the greatest share of the world's markets for American manufactured goods, and he was reasonably successful. Now that he is President of the United States, he is not less likely to pursue that policy, and what we have to consider, in the face of this further American export activity, in the face of German industry growing steadily and progressively into a greater manufacturing capacity—these things in themselves are of no harm; on the contrary, the greater the output, the greater the wealth of the world—is whether we are sure that our policy is such as to ensure that we shall get the greatest possible share of this wealth. I do not believe it is.
It is arguable whether it is right or wrong to earmark a portion of the foreign loans raised in any country to be spent wholly on the manufactured
goods of that country. I know that academically it is unnecessary to do anything of the kind, because in the normal course of your export trade you will be repaid for your loans. That may be academically correct, but it is not the policy of the United States of America, because there they definitely earmark a portion of the foreign loans raised in the United States to be spent on the manufactured goods of that country, and I think it might be well if we reconsidered our policy in that respect. If it be true that trade follows loans, as I believe it is, then it is to our advantage to do as much in the way of raising foreign loans in this country as is within our power. Since the War the countries of South America have raised very little capital in this country, but have usually gone to the United States for their loans. That may be because we in this country have a 2 per cent. duty on all foreign loans raised in this country, but I want to ask the Government to reconsider how this duty works.
Since the War the Argentine has raised £70,000,000 of capital in loans from the United States, and not one penny in this country. That cannot be for reasons of sentiment, because everyone knows that the countries of Southern America would prefer on sentimental grounds to raise their loans over here, and it may be that it is simply due to this 2 per cent. duty on all foreign bonds.

Mr. MacLAREN: It is not the 2 per cent. duty.

Captain EDEN: The Colwyn Committee investigated this matter, and their findings are sufficiently interesting. They said:
We have not viewed the Stamp Duty with much favour. If the 2 per cent. duty on bearer bonds be detected as having a material influence on foreign loans, then the rate of duty should be lowered.
Have any other investigations been made in this matter since the Colwyn Committee reported, and, if not, will the Government undertake such an investigation? If it be true that that small tax does militate against the raising of loans in this country, I think that without doubt that duty ought to be lowered. This Committee could well consider revising its policy in these matters, and at the same
time it might consider the advisability of earmarking a part of the foreign loans raised here to be used for the purchase of British manufactured goods. These are the kind of matters that this Committee ought to consider on this occasion, for there are no other opportunities for raising them, and if our financial and industrial relations are not as closely related as they should be, it is the task of this Committee to synchronise them more effectively.
Finally, I come back to the actual proposals themselves, and I would only say that I regret this Budget because it is so wholly unimaginative, and because it has no relation to the pressing industrial needs of our people. I am afraid that its effects will not be helpful to industry. We are all familiar with the motives which led the Puritan to stop bear-baiting. It was not that he felt any sympathy at all for the bear, but that he could not endure to see people amusing themselves. The Chancellor of the Exchequer has something of the Puritan in him, and I cannot help feeling that perhaps his motives in increasing taxation are not so much a desire to help the revenue as a reluctance to see the taxpayer even comparatively complacent in these islands. At any rate, he has most effectively harassed them, and the effects of the Budget must inevitably be to make conditions for British industry more difficult than they are to-day, in a world where competition grows every week more serious, and to that extent to retard any hope of national recovery and make our industrialists despair of the Government having the vision to unite and co-ordinate our financial policy for the pressing industrial needs of our time.

Mrs. HAMILTON: I rise with the knowledge that my speech will not give pleasure to the hon. and gallant Member for Warwick and Leamington (Captain Eden), for I am placed in the position of voicing the feelings of the great majority of Members on these benches in thanking the Chancellor of the Exchequer for a Budget which we value for its honesty, for its courage, and for its vital contribution to industrial and economic reconstruction. If the hon. and gallant Member assumes that we are silent because we have nothing to say, he must surely realise the difficulty which
constantly occurs to the critics of art, that it is very much more difficult to praise a work which one greatly admires than it is to find fault with a less distinguished performance, and the measure of our consent and of our appreciation is that we feel it unnecessary to say over again in less adequate words what has been clearly and effectively demonstrated for us in the Chancellor's own speech and in the financial statement.
The hon. and gallant Member made a very curious and suggestive comparison in attempting to characterise the Chancellor of the Exchequer. He suggested that he had a mediæval mind. Perhaps in some respects he has, and in many respects it is not a very bad thing to have. Indeed, I am inclined, with all respect, to suggest that the hon. and gallant Member's mediævalism does not go back much beyond the opening of the nineteenth Century. After all, what are the true characteristics, the outstanding characteristics, of the mediæval mind? The first is that ideas, for it, had objective reality; hence it was possible, nay common, to find the mediæval mind pursuing some spiritual, emotional, or intellectual aim with a passion such as we, in our supposedly superior day, as a rule devote only to much more material aims. The second great outstanding characteristic, the one which distinguishes it through its literature and its art, is the sense of sympathy for and brotherhood with the poor man. If such sympathy and such compassion are indeed marks of the mediaeval mind, they are shared by the Chancellor of the Exchequer and find expression, I think, in his Budget.
I regard the Budget mainly as doing two vitally important things. One is that it substitutes for imaginative flights at the expense of the community that fundamental honesty in matters of national housekeeping which will give us the only solid foundation on which to build anything useful. I am rather tired of these criticisms of the Budget on the ground of its lack of imagination. A little candour and a little frankness are more needed at the moment. Secondly, the Budget makes provision for carrying on the whole fabric of the Social Services; and that is the most important work this House is here to do: so to administer, foster, and extend the effectively available wealth of this country
that it will promote the welfare of its citizens. That is the primary job which we are here to accomplish.
On this matter I notice that the major Opposition speak with two irreconcilable voices. The right hon. Member for West Woolwich (Sir B. Wood) and other hon. Members opposite have frequently said that we must do something about the mounting cost of the Social Services, that we must consider them seriously, that they are becoming a burden which is crushing us, a burden which industry cannot stand. At the same time, while they say all this, again and again, they never make any specific proposals as to what is to be done about it. Therefore, one must assume that the action of the Opposition is more truly represented by the hon. Member for Westmorland (Mr. O. Stanley), who approached this question from a much more sympathetic point of view. But he seemed to assume that, Parliament having voted certain sums for these Services, they must automatically go on even if provision to meet them is not each year renewed.
Surely, unless the Chancellor of the Exchequer in his Budget statement had made provision to meet his inherited deficit, and to meet new charges, it would be impossible to carry on the existing Social Services at their existing level, and the beneficial results which in fact follow upon these Services, in putting a larger measure of consuming power in the hands of that section of the people whose demand, being steady, has a steadying effect on our industry, could not be secured. The fact is that the Chancellor of the Exchequer, in approaching his central problem, had to decide between reducing the Social Services or producing the same effect by levying indirect taxation on the one hand, or finding fresh resources out of which to provide for them. If there be agreement that the Social Services must be maintained, and if possible extended—and we, on these benches, certainly think that no other object is as important as that—then he had to find the resources to meet that object. In his Budget it seems to us, at any rate, that he has secured the major desirable thing by the least difficult and socially least expensive method.
I am not going to follow either the hon. and gallant Member for Warwick
and Leamington or the hon. Member for Westmorland further into those large areas of economic speculation in which all relativity seems to be abandoned. The hon. and gallant Member for Warwick and Leamington seemed to suggest that no mind could follow what happened when a tax was levied. I confess that my scepticism does not go so far. I am modest enough to say that I do not think my mind can follow it, but I think that other minds can. The hon. Member for Westmorland suggested that if direct taxation was not detrimental to industry, then it did not matter at all how much you levied. I do not want to follow these speculations. I merely want to repeat what is, after all, within the knowledge of all hon. Members of this House, and that is that, so far as a selection among instruments of taxation goes, the Chancellor of the Exchequer has the authority of the Colwyn Committee for thinking that income taxation is by far the least harmful. He has himself definitely met the one point which the Colwyn Committee said was detrimental, and that was the evil of double taxation. The Colwyn Committee were perfectly clear about the incidence of the Income Tax, holding that, save for quite exceptional cases, it cannot be shifted. They also stated in words which I propose to read to the Committee what the effect of income taxation, even of very high income taxation, was. They say this in the most specific terms in a paragraph which concludes a long and careful weighing and balancing of all the arguments that could be produced on the other side:
We conclude, with regard to enterprise, that the effects of high income taxation have been almost negligible in the field of employments and professions; over a great part of the industrial field, while appreciable, they have not been of serious moment, but it is clear that they must often have put a check on the more speculative class of business.
If hon. Members wish to defend that class of business, that is another matter. The Report continues:
Wider causes and taxation, however, and particularly the dislocation of our old export markets, must be held mainly responsible for the lack of buoyancy in recent years. Relatively, income taxation has not been a factor of high importance.
I thought it well to remind the Committee of this since the psychological insight and familiarity with business of the members of the Committee have been criticised. The Chairman was Lord Colwyn and he was supported by Sir Charles Addis, Sir Alan G. Anderson, Sir Arthur Balfour, Mr. Henry Bell, Mr. W. L. lichens, Sir William McLintock, Sir Josiah Stamp and a number of other members of equal eminence. It is therefore surely hardly open to Members of this Committee to cast doubts on and lightly put on one side the considered judgment of a committee of that character, which over a considerable period of time devoted the most careful examination to this particular question and came to a definite and considered judgment upon it.
The Chancellor of the Exchequer in his Budget has not merely safeguarded the present position of the social services, and provided for a normal expansion, but he has made provision in the taxes which he has levied for such a freedom of action next year, with a disposable surplus at his command, as to make it possible for him to say to the industrial community that any apprehension about bringing in new classes of taxation will, he hopes, not have to be entertained. But it should not be assumed, although the Chancellor stated that he hoped that he would not have to levy specific new taxation next year, that the plan of action on which the present Budget is based is the limit of what he may do later. He has not only the yield of £12,000,000 from new taxation for 1931, but he has the definite expectation—indeed, the certainty—that as one of the results of the Three Power Fact, and the discussions with other Powers which are to follow it, that a drastic reduction in armament expenditure will be well within his grasp. Actually the Budget, although it is criticised for not touching the general industrial and economic position, does make a substantial possible contribution towards it.
If one contemplates the economic difficulties now confronting this country and the countries of the world, one finds that they really reduce themselves to a position which is a most arresting criticism of the general economic system under which we live. It is plain that this
country, with others, is suffering from the extent to which the efficiency of the productive machine has overtaken our economic power of consuming its products. If we lived in a world which was rationally organised, the fact that it is now possible for the return to a given unit of human labour to be so much greater than it was 50 years ago, would be a circumstance which would cause infinite rejoicing. We should feel that we were accomplishing the aim for which we are here. But, for us, the existence of abundant harvests and excessive supplies of desirable goods means mounting distress all over the world. Here is, indeed, an alarming paradox. So far as the Budget contributes to the raising of the standard of life, it is a contribution of an important kind to the solution of the central problem. I therefore want to express the obligation which not only Members on these benches, but great bodies of men and women all over the country, feel towards the Chancellor, not only for the honesty and courage of his Budget, but for its optimism—an optimism based partly on the character of our people and partly on the possibility, through the application of communal control over national resources and the direction of those resources to social ends, of giving something better than the prosperity of the past to the people of the country.

Sir GODFREY COLLINS: The hon. Lady has quoted the Colwyn Committee in favour of high direct taxation, and while I am bound to respect the members of that Committee, it always seems to me that they did not take sufficiently into account the situation of our manufacturers here competing in the markets of the world against manufacturers of other countries who are not faced with heavy taxation. She will agree with me that the manufacturers in America, making large sums of money and not having to pay heavy direct taxation, are able to put money to reserve and use that money for future development. By that means, they are placed in a happier position than our manufacturers here. It is for that reason that. I think that heavy direct taxation has some bearing upon employment in this country. The hon. Lady also stated that there were but two courses open to the Chancellor in un-
folding his Budget: he could either have reduced the social services or have paid his way by borrowing.
The question which I have put to myself since I listened to the Chancellor on Monday is, What are the main causes which have led the Chancellor of the Exchequer to ask the House of Commons to levy an extra burden of £46,000,000 upon the taxpayers? There seem to be four reasons. The first is that the past yearly increasing yield of taxation has not been maintained except by the Income Tax; until this year it has always yielded a little more each year. He also reminded the Committee that the Stamp Duties had fallen, so that the normal increase of taxation levied last year has not brought increased revenue into the coffers of the State. Another reason why he is asking for £46,000,000 is the increased expenditure for which he alone has become responsible. That accounts for about £20,000,000, but it is fair to state when referring to that figure that the Chancellor of the Exchequer is carrying a burden to some degree which hitherto fell on the local rates, as he transferred during the last 12 months certain burdens from the local authorities to the shoulders of the National Exchequer. The third reason is the benefits which were given to industry by the late Chancellor to the extent of some £30,000,000. He imposed the Petrol Duty, which in the coming year will yield £17,000,000, while, on the other hand, he gave benefits to the extent of some £30,000,000. So that I think the late Chancellor is responsible for at least £15,000,000 to £20,000,000 of the increased burden which the present Chancellor is asking us to find.
The other main reason for our increased burden is the provision which the Chancellor has invited the Committee to make for increased Debt redemption. According to the figures given by the Financial secretary last night, during the last four years the total Debt redemption was only £130,000,000. I am reminded that during the same period the late Chancellor used capital assets to the extent of about £50,000,000. He raided funds, which are really capital assets, to the extent of £20,000,000, so that in that respect the record of the late Chancellor cannot stand any close investigation. I am glad that the present Chancellor has had the
courage to come to the House of Commons, even while trade is bad and unemployment is great, to ask the House for larger sums of money with which to repay our National Debt. If the late Chancellor at the very beginning of his office, had carried out the policy which he promised, of progressive reduction of expenditure, and had set his face steadily to withstand pressure from different quarters, our whole financial position would be very different to-day.
During the last four years the Chancellor of the Exchequer not only gave way, as all Chancellors must, to the political pressure behind him, but he distributed large sums of money, as the Leader of the Liberal party so cleverly pointed out this afternoon, to his adherents behind him. He found some £20,000,000 to £25,000,000 for the Beet Sugar Subsidy; he gave away £22,000,000 for the coal subsidy; and he gave way to the pressure of the Admiralty, so that during the last five years our Navy has had far larger sums than the necessities of the State demanded. [HON. MEMBERS: "No!"] Hon Members may say "No," but surely our Navy must be sufficiently strong to resist pressure from any quarter, and if we have regard to the strength of our Navy to-day, and visualise any potential enemy, every hon. Member will agree that our Navy is much stronger to-day than the necessities of the case demand.
I am faced this afternoon with a very simple question, namely, whether I will support a policy which we have had before this House for the last five years, or whether I will support the policy of the present Chancellor of the Exchequer? We know full well the policy of the late Chancellor. No right hon. Gentleman ever had a greater opportunity to carry through real economy than the late Chancellor of the Exchequer. He had behind him a large majority, and he knew that he could have carried through schemes of economy which, though they might have been unpopular to start with would have eventually produced savings. He held out hopes of progressive reduction of taxation which did not take place, and his Budgets have been strewn with deficits. I, therefore, range myself behind the policy of the present Chancellor of
the Exchequer. He has had the courage to invite this House to find large sums of money, even from the direct taxpayer.
I admit that high taxes, both direct and indirect, are harmful to business. I will not discuss at the moment the necessity of these taxes, but we are asked to find the money, and the question before us is, Where shall we find the money? Yesterday afternoon the late Chancellor of the Exchequer told the Committee that he would prefer to find certain large sums by way of a tax on foreign manufactured goods. The line of cleavage, as the Leader of the Liberal party stated this afternoon, between those above the Gangway on the Opposition side and those below, has widened during the last six months. I stand here as an unrepentant Free Trader, believing that our country can only maintain her position as a manufacturing nation by her ability to buy her goods at the lowest possible price, and I welcomed the closing remarks—
[Interruption]—I opposed four times all those fancy methods of dealing with sugar refiners. The right hon. Gentleman himself, hoping to give some benefit to agriculture by his beet sugar subsidy has caused—[Interruption.] It was initiated by the Labour Government, 1 admit, but the late Chancellor of the Exchequer was the first Chancellor to find money for that purpose.

Mr. CHURCHILL: I had to find the money.

Sir G. COLLINS: The Bill to give the subsidy was brought in and passed in this House by the President of the Board of Agriculture in the Conservative administration.

Major ELLIOT: Fulfilling a pledge of the Government.

Sir G. COLLINS: Whether it was a pledge or not, it was quite unnecessary for the President of the Board of Agriculture to carry out that policy. As a matter of fact, they claim the honour for having carried through that policy.

Major ELLIOT: There was a pledge.

Sir G. COLLINS: Before closing, I want to welcome the very striking words of the Chancellor of the Exchequer in his Budget speech when he said:
our immediate concern is to make these things
that is, the social reforms of which the hon. Lady has spoken—
ultimately possible out of revived and prosperous industry.
Then he went on to say:
So far as I can see, the steps which I have proposed for balancing this year's Budget will be sufficient to ensure, in the absence of unforeseeable calamities or of heavy increases of expenditure that no further increases of taxation will need to be imposed next year."—[OFFICIAL REPORT, 14th April, 1930; col. 2681, Vol. 237.]
In the opening months of the last Parliament we had a striking utterance from the late Chancellor of the Exchequer, who said he would bend his energies to reduce expenditure. That promise was made. I leave it to him to decide whether it was implemented. In my humble judgment they were mere words. The promise was not implemetned in action.

Mr. CHURCHILL: Would the hon. Member say what is the promise to which he refers?

Sir G. COLLINS: That each year there would be a progressive reduction of expenditure of £10,000,000.

Mr. CHURCHILL: That is a complete misquotation, and a misrepresentation.

Sir G. COLLINS: I leave that point to the judgment of the Committee. I have not the right hon. Gentleman's exact words with me.

Mr. CHURCHILL: What I said was that I had to aim at it.

Sir G. COLLINS: The only difference between the right hon. Gentleman and myself is this, that he said he would aim at it, and I, in my simplicity, accepted it as a promise. I admit that there was some misunderstanding. I do not desire to attribute to the late Chancellor of the Exchequer words which he did not utter, but he held out that hope. When a Minister of the Crown, a Chancellor of the Exchequer, standing at that Box on the principal day of Parliament during the year, holds out those hopes and those aims, the country is entitled to expect that he thinks it is possible for those aims to mature, and as they have not matured, as his debt redemption has been bad, and he has given way to political pressure on the points I have enunciated, I am very glad that the new Chancellor of the Exchequer, imbued
with sound principles of finance, has had the courage to come down and ask for more money in these difficult times, and I have much pleasure in supporting him.

Sir LAMING WORTHINGTONEVANS: The hon. Member for Greenock (Sir G. Collins) has thought fit to taunt my right hon. Friend the late Chancellor of the Exchequer upon what he calls his failure to fulfil his pledge to aim at a progressive reduction of expenditure. In all the main controllable items of expenditure my right hon. Friend carried out his promise, and if the hon. Gentleman wishes to complain and to condemn my right hon. Friend, he ought to go a little further and say to which of the items of expenditure he objects. He did say that he objected to the beet-sugar subsidy, but does he really mean that the subsidy has not been of immense importance to the agricultural interests in this country?

Sir G. COLLINS: I opposed the beet-sugar subsidy when it was introduced. The result of the subsidy has been this: There has been no increased wealth to the nation through that subsidy. There has been a transfer. Instead of grain or some other crop being grown, beet crops have been grown.

Sir L. WORTHINGTON-EVANS: That is not quite enough. The hon. Gentleman has got to show, in these times, when employment is the central feature of our difficulties, that what was done with regard to the beet-sugar subsidy was not worth doing in terms of employment in agriculture. The other specific item of which he complained was the defence expenditure. If he really considers the defence expenditure over the last five years, he will see that in no five years has there been so much economy and so much care in expenditure.
We are coming to the end of two days' Debate and I am following a large number of speeches which have dealt with most aspects of the Budget. The right hon. Gentleman the Chancellor of the Exchequer has during these Debates posed as a financial purist. He has claimed credit for having increased the Sinking Fund, and for having put upon the Paper a Resolution, which is merely a face-saving resolution, meaning next to nothing, dealing with future deficiencies; that we shall be able to dis-
cuss at greater length on another occasion. The position he has taken up is that he is so respectable a Chancellor that, though he is a Socialist, at any rate he is worthy to be trusted; he is not as other men are. He has endeavoured to disarm suspicion and, under the cloak of virtue, while making an extra provision of £5,000,000 for the Sinking Fund, he has at the same time taken care to borrow £10,000,000 for the Unemployment Insurance Fund, and has increased the capital tax of Death Duties by £7,000,000—not applying the proceeds for capital purposes, but bringing them into the ordinary accounts. He condemned his predecessor for having taxed in advance to make a provision for de-rating, and instead of utilising the reserve of £20,000,000 accumulated by my right hon. Friend for the purpose of paying off the deficit of £14,500,000 of which he complained—he could have done that—he has helped himself to the spoils to the tune of £16,000,000 and brought them into the Budget of the year.
The right hon. Gentleman has obtained a very notable ally in the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) who, as usual, amused the Committee in a speech which is inimitable. I would not like to say that he is developing as a "corner-boy," but, at any rate, he entertains the House more than anyone. To-day he produced from his voluminous pockets several leaflets, and to one of them he devoted 25 minutes in the middle of a Budget speech. What was that leaflet? That leaflet, read in public and in the atmosphere of the House of Commons on a cold afternoon, does read quite differently, perhaps, from the same leaflet read in election times. [Interruption.] Oh, yes; and let me say why. Before the Election, notwithstanding the taunts now made, we were trying to cut down expenditure. [Interruption.] Yes, trying to cut down expenditure; and my right hon. Friend brought into the revenue of the year—he has been blamed for it over and over again—surpluses which were in various funds. There was a surplus which was in the Army and Navy Health Insurance Fund, for example, a surplus of £1,000,000, or thereabouts, and we were accused of robbing ex-service men. Because of some
petty economy at the Ministry of Health we were accused of starving babies. [Interruption.] Yes; and the right hon. Gentleman still cheers. We were called "murderers." Every sort of epithet was being flung at us, because we were said to be soulless, selfish capitalists, cutting down the widow and the orphan.[interruption.]
That was the atmosphere in which that leaflet was issued. It was necessary that the people of this country should not be misled in the way the right hon. Gentleman has shown that he was willing they should be misled. The cheers of hon. Members opposite show that they, at any rate, are not repentant, and are ready to go out again on the platform and repeat those statements, although they know, or they ought to know. that they are untrue. If we are going to examine leaflets, we ought to examine some of the Liberal leaflets. [An HON. MEMBER: "Have you got any?"] Unfortunately I have not got any in my pocket, but I have a very good recollection of some of them. There are quite a number of them, and perhaps hon. Members below the Gangway will correct me if I misquote any of them. Hon. Members will recollect the Yellow Book containing a little blue figure about to address the audience, and in that Yellow Book appears the statement:
We can conquer unemployment without putting a penny on the rates, or a penny on the taxes.
How are you going to do that? The statement in the Yellow Book is that to achieve that object you were going to borrow £200,000,000 or £300,000,000. To carry out that pledge, if the Liberal party had been returned to power, the right hon. Gentleman the Member for Carnarvon Boroughs would have had to come to the House of Commons at any time during the last nine months with a proposal to borrow £200,000,000 or £300,000,000 for the purpose of conquering unemployment.

Mr. LLOYD GEORGE: I never suggested that you would have to borrow £200,000,000 or £300,000,000 in the course of a single year.

Sir L. WORTHINGTON-EVANS: The borrowing which the right hon. Gentleman was going to do was to be done
within two years, and within two years he was going to conquer unemployment. [HON. MEMBERS: "Five years!"] Five years was not the statement in the leaflet, and it looks just as odd to have that sort of leaflet brought up in the House of Commons when it is known that it is impossible to early out what is suggested in it, although it was not known to be impossible at the time of the election. The right hon. Gentleman the Member for Carnarvon Boroughs has spoken this afternoon as the chief of the allies of the Labour Government, and he has supported the claim of the Chancellor of the Exchequer that he has been forced to increase taxation owing to the large deficit which was left by his predecessor in office. That is the claim. I know that the Chancellor of the Exchequer goes further than that, but his ally only goes half the way. The speech of the right hon. Gentleman the Member for Carnarvon Boroughs is about the first speech in which he has had any real support, except from the Financial Secretary to the Treasury. But is the statement about the deficit true? As a matter of fact, if the Chancellor of the Exchequer had not increased his expenditure, there would have been enough money left without the legacies of debt to see him through this year. [HON. MEMBERS: "No!"] My right hon. Friend the Member for Epping (Mr. Churchill) dealt with the figures in his speech, and the Chancellor of the Exchequer, if he contradicts me, will no doubt reply to those figures. We have before us a set of figures given by my right hon. Friend, which I believe to be correct, and from those figures it is clear that the statement of the Chancellor of the Exchequer is incorrect. The right hon. Gentleman said that in 1931 there would be a deficit unless some receipts from other taxes cover it, or some new taxes were put in their place.
Let the Committee notice the difference. These are not deficits in the ordinary way, because they are really a transfer from rates to taxes, and they are not additional expenditure. De-rating expenditure is not additional expenditure, because it would have taken place in any case, the only difference being that before it would have been taken out of the rates and now it comes
out of the taxes. Consequently, it is a relief as well as an expenditure. When the right hon. Gentleman complains of a deficit, he ought to know that it is almost impossible for a Chancellor of the Exchequer to reduce a tax if it happens to be his last year without passing on the result to his successor. A reduction may mean only £1,000,000 the first year and £5,000,000 the next year, and it is the next year which will have to suffer in consequence. This shows that there is a limit to the statement which the Chancellor of the Exchequer is constantly making, that it is owing to the policy of his predecessor that he has to raise taxation. That is what the right hon. Gentleman said last night on the broadcast. Here we can deal with the right hon. Gentleman, but it is not easy to answer him on the broadcast, and I think that is very unfair. When the right hon. Gentleman has got the people at his mercy, and cannot be answered, he ought to be much more careful that he states not only the truth but nothing but the truth, and he should not have taken the course he did.
The Financial Secretary to the Treasury supported the Government yesterday, but he found himself in great difficulties before he reached the end of his speech, and we can judge his arguments by his peroration in which he said that the credit of the Labour Government was infinitely better than the credit of the Conservative Government. The Financial Secretary said that when the Conservatives came into office in 1924 Consols were at such and such a price, that when they went out they were lower, and that yesterday, after nine months of a Labour Government, they had gone up; and he said the same result had happened in the case of the Funding Loan. The Financial Secretary claimed that as evidence of the better credit established by the Labour Government. I will give the figures of Consols. The Financial Secretary said that in 1924 Consols stood at 58½, and that in June, 1929, when the Conservatives went out of office, they stood at 55, showing a drop of 3½; and to-day he claimed that they stand at 56k. Those are the figures which were given by the Financial Secretary. The hon. Member did not give the figures for October last, when Consols stood at 53. which is lower than they have ever been
before, and this after four or five months with a Labour Government in office.
When the Financial Secretary bases his case on those figures it is Absolute nonsense, because the price of Consols and the Funding Loan depends upon the value of money, and not upon the mere chance as to whether this or that Government is in office. If there is any comparison to be made in this respect, it should be made in a different way. The comparison that ought to be made is that while the Conservatives were in office trade was better and was improving. Money was required for trade development, and it was not going so much into Government securities, but was being used for developing trade and giving employment. Now that the Labour Government have got back to office confidence has gone, trade is slackening, and people will not invest their money in new enterprises, and they are finding safety in Government securities, which have gone up. That is the true comparison to make, but I do not believe in either of those comparisons.

The FINANCIAL SECRETARY to the TREASURY {Mr. Pethick-Lawrence): The right hon. Gentleman represents what I said as a peroration.

Sir L. WORTHINGTON-EVANS: It was the last thing that the hon. Gentleman said.

Mr. PETHICK-LAWRENCE: I did not happen to have a peroration, and I just stated some facts. I was dealing with the Sinking Fund, and I was explaining that as a result of the policy of the previous Chancellor of the Exchequer, by which the Sinking Fund had not come up to the statutory Sinking Fund, the national credit had gone down. That is exactly what took place. By the national credit I mean the price at which money can be borrowed for the purposes of the State. That had gone up, and credit had gone down, and I said that, owing to the better policy of my right hon. Friend in regard to the Sinking Fund, the position had been reversed, and at the present time the national credit was higher. It was not a peroration on the whole thing; it was simply a statement of fact with regard to the result of the difference between the Sinking Fund policy of the previous Chancellor of the
Exchequer and that of my right hon. Friend, and I think my comparison was perfectly justified.

Sir L. WORTHINGTON-EVANS: At the conclusion of his speech, the Financial Secretary used these word:
Under the right hon. Member for Epping the credit of this country went steadily dawn, but under the honest finance of my right hon. Friend it has gone steadily up."—[OFFICIAL REPORT, 15th April. 1930; col. 2850, Vol. 237.]
In order to prove that statement, the Financial Secretary made a comparison in the values of Consols and the Funding Loan, but that comparison has nothing whatever to do with the case. If it has, how does the Financial Secretary account for the terrible drop during October of last year, after the Labour Government had been in office only four or five months, when Consols were lower than they had been for a long time? There is another indication which ought to be mentioned, and that is what has occurred in regard to foreign exchanges, a point which my hon. and gallant Friend the Member for Westmorland (Mr. O. Stanley) dealt with earlier in the afternoon. There is no evidence of confidence in the Labour Government in the action of foreign exchanges, and that is a far better test than the price of Consols or of the Funding Loan.
The financial aspects of the Budget have been satisfactorily dealt with by my right hon. Friend the Member for Epping, my hon. Friend the Member for East Aberdeen (Mr. Boothby), and by my right hon. Friend the Member for Sevenoaks (Sir H. Young), and I do not think I need deal with that question any further. I would like to refer to what the Chancellor of the Exchequer said in his broadcast speech. In that speech last night the Chancellor of the Exchequer discussed the effect of the Budget on national life and prosperity, but surely the outstanding feature of our national life to-day is unemployment. There can be nothing so outstanding, so exceptional, and so distressing as the position of unemployment, and one of the causes of unemployment is the loss of our export trade, and the check which has been placed upon new enterprises. We are spending most of our time not in considering how we can go out into the different parts of the world to increase trade and give more employment at
home. We are spending time examining our industries in regard to rationalisation, and seeing in what way we can amalgamate businesses and so forth. I am only claiming not that we ought not to do it, but that it is the outstanding feature of national life.
The Chancellor of the Exchequer, in a recent speech, said the Budget should be judged by what effect it had upon the trade and industry of the country. Last night he dealt with it by asking us to consider the Budget in relation to our national life and prosperity. This is the quotation to which I want to call the attention of the Committee. He said that every Budget ought to be so framed as to relieve as far as possible the burdens on industry and to levy taxation in such a way that it would rather stimulate than depress enterprise and industry. Of course, we agree with that, but how does this Budget stimulate industry? Half the export trade is with the Empire. How does this Budget stimulate that trade? There is not a word in the right hon. Gentleman's speech, not a line in the Budget that does anything to stimulate the trade within the Empire. Indeed, there is something which depresses it. What with the actual and promised withdrawals of Preference, there is not only no stimulation, but there is a positive depression likely to be caused in the trade of the Empire. My hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) yesterday gave some very remarkable figures on the safeguarded trades. Now we have stimulated those trades. The right hon. Member for Carnarvon Boroughs wanted to know why the Government should be blamed because they have allowed a five years' Safeguarding to lapse, and because they had said they would not continue them. The answer is this: The right hon. Gentleman himself says that the Budget ought to stimulate trade. Unless you can show that the Safeguarding of trade has not stimulated trade, then at least it ought to be continued. In five years, we have had the trial and we have had the proof. It has stimulated trade. There is not one of the Safeguarded trades which has not been improved and increased both as to the output and as to the employment given.
My hon. and gallant Friend asked some specific questions which the Financial
Secretary avoided. He asked why it was they were not renewing the Safeguarding Duties. Is it because prices have risen? Is it because employment has not improved? Is it because the export trade has been hurt either in those or in any other trades? The Financial Secretary gave no answer to those questions, and I repeat them. As the right hon. Gentleman is going to speak later, I trust he will give a real answer to the questions which have been put to him. He could stimulate trade, in my judgment, if he net merely did not allow the Safeguarding Duties to lapse, but if he increased the Safeguarding and spread it over other trades. My right hon. Friend the late Chancellor suggested yesterday that even a revenue duty might be put upon imported manufactures of finished goods, and he quoted as an example the action of Holland who put on an B per cent, duty. The Financial Secretary was at him at once, and said, "Do you mean to have an Excise Duty? If not, it is going to be sheer protection." You have got an Excise Duty already on those trades that are safeguarded. True, it is not called an Excise Duty, but the Income Tax, the taxes, the stamps that are deducted for social services—those are all taxes upon the manufacturing trades of this country, and they are equivalent to an Excise Duty of probably 10 or 20 per cent. There is a very great danger that, unless there is a Customs Duty, the revenue that you get from those alternate Excise Duties will fail you. There is some evidence of failure at this moment. Income Tax is not resilient. It does not increase year by year in its productivity. On the contrary, we have got to a stage when it looks as if there is a falling back. There is a loss on your Excise Duty.
Let me give an easy example. Take beer. [Interruption.] I want to take something everybody can understand. There is an Excise duty on beer and you have got a Customs duty, but how much of the Excise duty do you think you would be able to collect if you had no Customs duty at all? You would get free imports of untaxed beer into this country, and you would lose the money you now get from your Excise duty. You are running the same risk now. You are charging what is equivalent to a high Excise duty on your manufactured goods and, unless you put on a Customs
duty to bring you revenue as well as employment, you are likely to lose. The test of a Budget is to stimulate industry, and not to depress it. There is a power in the Government to stimulate trade and protect the Revenue, if it chooses to do so, by extending Safeguarding.
There is only one other quotation from the right hon. Gentleman and I am finished. I go to the broadcast again; it is very fruitful. The Chancellor said that the first concern must be to restore a spirit of confidence and enterprise among our traders and industrialists. Confidence? What do the traders see in front of them? They see the Labour party split. The Independent Labour party representatives are claiming more expenditure and more taxes, and the Government also more, but not so much, expenditure and taxes. Neither of them pretend to endeavour to reduce expenditure. The Independent Labour party and their representatives proclaim their policy, but the Government under a cloak of righteousness endeavour to conceal their predatory intentions. Traders know also that the pressure of the Left Wing will force the Kerenskys whether they like it or not.
Traders are faced with increased direct taxes of at least £35,000,000 extra to take the place of the indirect taxes which the right hon. Gentleman again promised in the broadcast last night should be taken off in the lifetime of this Parliament. £35,000,000 is to go from the indirect taxes, and the traders will see that that is to go on to them as direct taxes. Goodness knows how much more there will be for additional expenditure which the Government will either willingly undertake or be forced to undertake by their Left Wing! What else do they see? They see that there is no help against foreign tariffs, no endeavour to extend Empire preference, and a prospect of a continued State interference with business, just as they have done in the Coal Bill. Any trader must be sanguine. indeed, if he thinks that with this Government he can have confidence. I do not believe the right hon. Gentleman really is so sanguine as to believe that they will have confidence. I do not believe he is so foolish. When he told us over the wireless last night that his concern was to establish confidence, he
was only handing out more dope, such as we have been having throughout this discussion.

Mr. LOVAT-FRASER: That eloquent wit Sydney Smith said that there were two things nobody could escape in life. One was death and the other was taxes. That being so, we have to make provision for taxes. The Chancellor of the Exchequer has to face the difficult task of taxing the people as economically as possible, and at the same time with the object of doing as little injury as possible to industry. The Budget, so long looked forward to, has become public, and all the world knows what it contains. We were told yesterday that London was very alarmed at the Budget. It does not take much to alarm the City of London. Any proposal to increase taxation or to impose a new impost always alarms the City of London. That centre of Toryism has never received any Budget from the Liberal party—I propose to speak of the Liberal party, because the Labour party has had no experience of producing Budgets—without proclaiming that it would be the ruin of London. I have spent much time in reading political reports of the past, and I commend to anyone who feels cheerless or pessimistic to read the Budget speeches of former years. The prophecies of ruin, the prophecies of disaster, the words "Mene, mene, tekel, upharsin" written in the Budget speeches of the pant will quite satisfy those who read them that no undue alarm need be felt over the Budget we have before us.
It is idle to suggest that any serious harm will be done to industry or to trade by this Budget. London is enormously rich. For centuries London has been enormously rich. I was reading the other day that in the thirteenth century King Henry III said that the London merchants were rich to loathing, that, if the treasures of Imperial Rome were put up for sale, the London merchants would buy them. It has been so all through the centuries. London is able to bear many extra sixpences on the Income Tax. There are 30 times as many millionaires to-day as there were a quarter of a century ago. There are 30 times as many Super-tax payers as there were a quarter of a century ago. Let hon. Members realise what that means. It is largely
due, of course, to the War. Those who now enjoy these large fortunes enjoy them because that Capital Levy which we advocated after the War was never brought into operation. In 1928, the new capital raised in the London money market amounted to £369,000,000, an increase of £14,000,000 over the year 1927. Therefore, I do not think we need worry ourselves unduly about the City of London.
Reference has been made by various speakers opposite to the amount that is spent on the social services, and it has been stated that that expenditure is a serious burden. I would ask the Committee to look at the matter from a point of view which I do not think has been put by any previous speaker. Apart from the question of humanity, apart from the distress that is prevented and the suffering that is avoided as a result of the social services, it must be remembered that the social services are an important pillar of our home trade. The large amount of money that goes in social services is an immense boon to an enormous number of traders in this country. Imagine the social services swept away and the consequent payments to the poor and to the workless no longer made. What about the tradespeople in the back streets? What about the innumerable tradesmen who send Members of Parliament here to attack the very social services that are preventing them in their back streets from becoming bankrupt? If manufacturers, instead of burying their profits in Australia for the sake of higher interest, instead of sending their money to Germany and other countries abroad to be used by rivals of British industry, would pay larger wages to their workers, they would help industry, would promote purchasing power, and would vastly increase the number of consumers, and thus they would benefit themselves by that act of justice to the vast body of workers.
With regard to the Safeguarding Duties, the first great Tariff Act was produced in the United States a little over 100 years ago, and that is known in American history as the Act of Abomination. If I may be forgiven for speaking for myself, I would say that the Safeguarding Duties are abominations. Their most pronounced feature is the way in which they demoralise industry. I do
not know whether hon. Members have followed the proceedings of the Committee before which industries wishing to be safeguarded have to come. If they have, they will have been struck with the, shall I say, dishonesty that is shown by people wanting their industries to be protected. I will not, however, say "dishonesty," but the claims which are examined prove to be very illusory. These duties encourage slackness and inefficiency in the workers and manufacturers. Not long ago I was told by a prominent man in the iron and steel world that he knew of certain iron and steel manufacturers who refrained from modernising their plant, from bringing their industries up to date, in the hope that they would get from the Conservative party a Safeguarding Duty.

Major COLVILLE: Will the hon. Member state the reason why the iron and steel industries have not modernised their plant?

Mr. LOVAT-FRASER: I have said that it was because they were hoping to get Safeguarding from the Conservative Government.

Major COLVILLE: Have they the money to do it at present?

Mr. LOVAT-FRASER: I am stating what is notorious, namely, that large numbers of manufacturers are refraining from spending money on modernising their plant and bringing it up to date, because they are hoping that they will be protected by Safeguarding when the Conservative party comes into power.

Mr. MACQUISTEN: Is not the hon. Gentleman aware that all the iron and steel works in this country are enormously indebted to their banks, and cannot save any money?

Mr. LOVAT-FRASER: I was stating that iron and steel manufacturers, and manufacturers generally, are looking forward to Safeguarding, and will not realise that the proper way to restore industry is by organising, by energy, by science, by determination that everything possible shall be done in order to bring their plant and their factories up to date. I have here a quotation from a speech by Mr. Selfridge, in which he states that it is not Safeguarding that is going to restore prosperity to industry, but organisation, energy and science. Speak-
ing of the lack of enterprise among British firms, Mr. Selfridge quoted the case of an American buyer for a big Chicago house, who asked a British firm of hosiery makers to vary the design of the stripe on certain men's hose to suit American requirements, conditionally on receiving an initial order for 2,000 dozen pairs and, if satisfactory, an extension to 10,000 dozen pairs. After waiting two days, he was informed by the salesman that the directors had refused to vary the design. The buyer, therefore, went to Germany. Half-an-hour after arriving at a certain works, he reached the head of the firm. Half-an-hour later a foreman had been called in, and the design for the socks was made. An order was immediately placed. That is what is injuring our industry, and yet I would wager almost any money that that English hosiery manufacturer is probably shouting for Safeguarding at the present moment.
This Budget is essentially a Free Trade Budget, and for that reason we joyfully support it. We have no use for Protection. May I be allowed to describe Protection in the eloquent words of a gentleman well known in this House? They are contained in a publication entitled, "Why I am a Free Trader," by Winston Churchill. It was published in 1905, and I was so much struck with it at that time as an exposition of the doctrine of Free Trade that I have preserved it ever since. I have constantly consulted it. and I even took the liberty of showing it to the right hon. Gentleman himself last night. This is how he speaks of that Protection which we on this side of the House abhor, and which we are very glad to see has been dealt a serious blow by the Budget. He says:
It is the theory of Protection that each country should make everything possible itself, and that foreign goods which compete with existing or potential home industries should be shut out or penalised. 'Let the nation do its own work,' that is the cry. And it is believed that if the importation of goods that we now get from the foreigner were to be stopped, we should make those goods ourselves, and, in addition, all the goods that we are making now, including—observe—what we send to the foreigner in exchange for what he now sends to us. The doctrines that by keeping out foreign goods more wealth, and, consequently, more employment, will be created at home are either true or they are not true. We contend that
they are not true. We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
Why should the world's shipping labour in the chops of the Bristol Channel, or crowd up the dreary reaches of the Mersey? It is because the perverted ingenuity of man has not been occupied in obstructing our harbours with fiscal stake-nets and tariff mud baths. That is why they come.
I remember reading that someone showed to Matthew Arnold late in life something which he had written early in life, and which he had forgotten. When he saw it he said, "Did I write that? How good it is! "I wish that the right hon. Gentleman the Member for Epping (Mr. Churchill) had been present to say that of this quotation. I will ask the Committee to allow me to proceed with it a few lines further. He went on to say;
That is our one great advantage; and when we have thrown it away, what shall we have to put in its place? Of the whole volume of our importation, so complicated, so varied, so immense, which flows in a thousand unseen and incalculable channels through the industry and commercial life of the nation, scarcely fifty millions are ready for final sale, and all the rest are either the material of some industry or other, or food, which is the raw material of human life. The finished product of one trade is the raw material of another. By placing taxes on any of these commodities to raise their price you may, indeed, for a time help this trade or that wade, but it will only be at the expense of this or that other trade and to the impoverishment of the general consumer. No one can tell whose enterprise will be hindered or whose it will be that will be undermined. You may by the arbitrary and sterile act of Government—for, remember, Governments create nothing and have nothing, to give but what they have first taken away—you may put money in the pockets of one set of Englishmen, but it will he money taken from the pockets of another set of Englishmen, and the greater part will he on the way. Every vote given for Protection is a vote to give Governments the right of robbing Peter to pay Paul and charging the public a handsome commission on the job. I think often that Fair Tracers only look at one side of the case. They see the river flowing to the sea; they observe that it is flowing all one way; and they wonder how long it will be before the whole country is drained dry. They do not observe the fertilising showers by which in the marvellous economy of Nature, the water is restored to the land.
With these words ringing on our ears will resume my seat.

Miss RATHBONE: ; When I heard the speech of the Chancellor of the Exchequer
on Monday, I felt inclined to believe the story that is current that in the Treasury itself, that sanctuary of financial orthodoxy, they hold themselves twice blessed. They have had Chancellors of the Exchequer who hated to spend money on armaments, and they have had Chancellors of the Exchequer who hated to spend money on social services, but never before have they had a Chancellor of the Exchequer who so clearly disliked spending money on anything. How can we wonder that there are sore hearts, not only on those uttermost summits from which some hon. Members opposite gaze over the green slopes into futurity, but also, if we could read their hearts, in I believe, many of the right hon. Gentleman's colleagues? Can there be any Minister in this Government, which came into power on the wings of "Labour and the Nation" as its Election Manifesto, who has not conceived in his brain some plan for bringing to fruition some of those seeds of hope which were scattered so profusely? Some have already given birth to offspring, and for them, no doubt, the Chancellor of the Exchequer's Budget does provide exiguous raiment of a sort; but he has cut his cloth so closely that there is little room for any change of plan or of growth to fit the natural development.
Take, for example, that great scheme of slum clearance which was born only a week ago. Some of us were surprised at the time, remembering all that the Minister of Health had said about the great things in the Bill, to find that he mentioned such a paltry sum. We were told it was only arithmetic, but we feared that the choice of such a small amount indicated that he really knew that he would have very little to spend. Now we know that we were right. He will have very little to spend. We in the House can put two and two together. The general public cannot so easily see the delusion of the promises with which they have been led astray. One of the achievements of science is that which enables a film or a slide no bigger than a man's hand to throw on the screen a wonderful picture of a beautiful future, and one of the achievements of electoral success is to make a very paltry achievement look like something very great and magnificent. But there is such a thing as keeping a promise to the ear and breaking it to the sense.
It is not for us who do not profess to be fiscal experts to judge in every particular a Budget which has had to face such difficulties as have confronted the Chancellor of the Exchequer. Where his arguments are purely fiscal arguments, I for one would not venture to express an opinion on them, but some of the arguments which he has used are not purely fiscal arguments. Take, for example, that passage in his speech where he spoke of what he proposes to do about beer. Some years ago the Chancellor wrote this:
It was anti-social and immoral to enjoy comforts and advantages which are purchased at the expense of the health and happiness of others without doing all that is possible to alter that state of things.
Only last Monday the Chancellor of the Exchequer told us:
Though personally I would much like to see the vast sums that are now spent on alcoholic liquors diverted to more useful purposes, I recognise that those who spend these sums, often from very inadequate means, contribute to the national revenue, in the main, out of all proportion to their means, and I do not think it would be fair to tax their misapplied expenditure still more."—[OFFICIAL REPORT, 16th April, 1930; col. 2673, Vol. 237.]
"I do not think it would be fair." Not, "It is not fiscally possible," not that the utmost yield that beer can vouchsafe to a harassed Chancellor of the Exchequer has been tapped. Indeed, how could it be so when the additional tax he intends to impose yields something under £3,000,000, whereas in 1923 under a Conservative Government the yield was £15,000,000 What could not have been done with that £15,000,000 to make it more possible for Ministers to develop children's brains and to give a chance to their various projects, their yet undelivered children. What, for example, could have been done in the matter of slum clearance? It might have cost only £5,000,000 to make it possible for the President of the Board of Education to give the maintenance grants he speaks of without applying a means test. The consumption of tobacco, to take one working-class luxury alone, is such that the yield to the Revenue is £63,000,000. Many of us feel that, when the Chancellor said it would not be fair to tax beer more heavily, what he really meant was that it would not be a good election cry. It would not, perhaps, be
a good election cry with a large section of the electorate.
There were the days when the Labour party used to be fond of the slogan, "No cake for anyone till everyone has enough bread." I do not think even in those days they ever suggested this variant of the slogan, "No beer and batty for bachelors until the babies have enough bread and milk." If the Labour Government were in earnest, if they had the courage of the convictions which they set forth in their election manifesto, they would find the means so to tax the luxuries of poor and rich, that they could do more for the children of the country. It is always, after all, the parents who are bearing the greater part of the burden. I believe courage of that sort, if it was unpopular with the men electors, would find a welcome response from the women.
1 sometimes think there is a time lag even in the views of parties on questions of electoral expediency. They are not quite roused up yet to the fact that there is a woman's vote as well as a man's, and that they might effectively put a heavier tax than they do at present on certain luxuries and the women voters at least would rise up and call them blessed. I do not suggest that some of the schemes to which the country had been led to look forward could be wisely achieved out of indirect or luxury taxation. Although we do not call ourselves financial experts, we are only too willing to sit at the feet of those who are, but what are we to do when the experts themselves differ? The right hon. Gentleman the Member for Sevenoaks (Sir H. Young), who is a financial expert, said yesterday that taxes of the sort that are imposed this year are indeed a heavy burden upon industry. The Chancellor of the Exchequer, in a previous broadcast speech, after enumerating what the country now pays in Income Tax, Super-tax and Death Duties, asked whether, with such burdens as those upon our shoulders, it was any wonder that we had suffered industrial depression. Yet the Financial Secretary, another expert, told us last night that
When taxation is used either for expenditure by the State or in the case of Social Services, in so far as it is used beneficially and wisely—I perfectly agree that
it must be used wisely by the State or in the Social Services—it gives not only equal purchasing power, but an equal stimulus to industry with the luxurious expenditure, which it displaces. If it is used wisely, it is more beneficial to the community, because it encourages staple trades instead of luxury trades."—[OFFICIAL REPORT, 16th April, 1930; col. 2850, Vol. 237.]
I think the Committee is entitled to know much more clearly and definitely than the Chancellor has yet told us whether he agrees with the right hon. Gentleman the Member for Sevenoaks or with the Financial Secretary. If wise expenditure encourages staple trades instead of luxury trades, why has he not only tapped to so small an extent the possibilities of increased taxation on the very rich, but also pledged himself that in the future there shall be no increase of taxation? I think many would have accepted without question all his present provisions if it had not been for that unusual and unnecessary pledge as to the future.
When experts differ, I turn to my books. Several speakers to-day have quoted from the Colwyn report. I think se are entitled to know whether the Government stands by the conclusions of I he Colwyn report as to the failure of direct taxation seriously to increase price levels or to affect industry. It was not only the majority, but the minority report of the Colwyn Committee that denied that there was any serious effect on either price levels or on industry. Take only one very short sentence from the majority report.
The burden of direct taxation while we do not wish to belittle it, is fess crushing than is frequently represented. It does not, with trivial exceptions enter directly into prices, and its indirect effects are not such as substantially to affect the general price level. Again, it has widely diffused psychological effects and has been responsible for a great deal of the discouragement while trade has been suffering from long drawn out depression due to wider causes. On the other hand, some of the psychological effects have been actually beneficial.
The minority report which, after all, we may take it, represents rafter the views of the Labour party in its conclusions as to direct taxation says:
Such taxation cannot in our judgment reduce the aggregate purchasing power of the community nor do we find that, it raises prices or materially reduces the national output of work, of saving or of enterprise.
I prefer to take the considered judgment of the Colwyn Committee rather than the
obiter dicta even of experts of such eminence as the right hon. Gentleman the Member for Sevenoaks and various other speakers who have taken the view that he took as to the effect of taxation on industry.
We have heard much from the Chancellor and from others of the psychological effects of taxation on industry. May I allude to one psychological effect which me have not heard referred to. One hon. Member spoke of the big business class on whom the burden of this Budget, such as in is, is mainly to fall. I greatly welcome the fact that it is not to fall upon the middle rank of incomes on the professional classes, those men who get so little from the State and contribute so much. I think it was the right hon. Gentleman the Member for Sevenoaks who spoke of the small, defenceless class which provides the capital, the leadership, the knowledge, and the enterprise. It is not or me to differ from that favourable verdict on the class of leaders in enterprise.
I come from a great commercial community, I being myself to a family which has been in business for many generations. Simply as an outside observer I have watched one psychological effect of the present distribution of wealth. Are those qualitie ascribed to enterprise, energy, and iniative hereditary or not? I believe myself that they are hereditary. I beeve the little finger of heredity is wicker than the two loins of education and environment. If so, those who are in big business, the leaders of enterprise, ought to pass on their ualities to their sons. Is it not the c[...]e that often the very fact that so late a proportion of the wealth remains with them and is handed down from generation to generation means that energy and initiative are sapped. I remember in my green youth once grumbling to my Oxford tutor that there was no wear restriction upon those who obtained scolarships. The rich man's son could go a scholarship at Oxford and could has given to him by his father the adder amount as pocket money. I was told that the question has often been considered in Convocation and that it had been aided that it was not worth while doing anything because rich men's sons so selom obtained scholarships. I once kne a young man with
great possessions who began life in business for which he showed a very great aptitude—

The CHAIRMAN: I am diffident about interfering with the discourse of the hon. Member, but really she is far away from the Budget now in her references to scholarships at Oxford.

Miss RATHBONE: I am about to conclude. I believe that those who speak of the possible deterrent effect on business of taxing too heavily large profits overlook that much more subtle psychological effect in sapping energy and enterprise by making things too easy for those who belong to the big business class. The poor in this community do not get a chance to rise to the full stature nature intended for them, either physically or mentally. The sons of the rich get that chance, but they throw it away, because life is too easy and too pleasant for them. Therefore, I for one would have welcomed, though belonging to no political party, a more daring, a more adventurous Budget, a Budget that paid less attention to electoral popularity, that taxed much more rigidly luxury expenditure, whether of the rich or of the poor, and that taxed especially that form of wealth which has been earned by the first generation but which is passed on from generation to generation.

Major SALMON: No Budget or industry can be successful if built upon unsound finance. What does this Budget do to deal with the affairs of the country as we find them to-day? We have had trade and unemployment enormously increasing, and yet we have had put before us a Budget which means the finding of many extra millions of money. How is it that this Budget is so much larger than any previous Budget? Those who have followed the Debates in this House for the last nine months have seen scheme after scheme brought forward costing millions of pounds, in some cases for the improvement of social services. I am sufficiently bold to say that there must come a time when we must call a halt in regard to social services. We must have regard to the position of the country generally.
We must ask, if it is proposed to increase the social services: Can we afford to do so at the moment? The increase which was given in unemployment benefit
was not necessary. The introduction of a new system of finding employment is one which is going to cost the country a considerable sum of money. I feel that it is up to the Government to suggest other means of raising revenue. I admit that having incurred liability you must foot the bill, but I suggest to the Government that the method which they are adopting is going to be a burden upon industry. It will prevent the development of factories in this country, because you are going to take the reserves for taxation instead of allowing them to be spent on development. You are going to do more. By this increased taxation you are going very largely to increase unemployment, because the first thing that employers will be compelled to do will be to curtail their expenditure, and the way they will do it will be by reducing their employés. In the result we may get into a vicious circle of finding that as time goes on, instead of unemployment being less, it will, unfortunately be much higher.
The idea which seems to permeate the speeches of many Members of the Socialist party is that by making the rich poorer they are going to make the poor richer. That is a fallacy which one hears very often from those benches. The hon. Lady the Member for the English Universities (Miss Rathbone) made a statement that the money which is earned by employers is not properly spent in the development of their industries, but is left to their sons to spend and to waste. That may be so in a few cases, but I believe that the industries of this country have been built up entirely by the savings of those industrialists in the past. Those savings are now being taken away. As a consequence we shall be in a very serious plight in the near future.
We have heard to-day from an hon. Member that Safeguarding was simply wanted because industries would not find money to modernise their machinery. Can the hon. Gentleman say that America, which is a highly taxed country, has not the most modern machinery in the world? It is an absurd argument. We have passed the experimental stages of Safeguarding. We have proved beyond doubt that it does one of two things, and, in many cases, both. Whenever Safeguarding has been introduced, it has prevented the decrease of trade which was taking place in the particular industry. It has pre-
vented the discharge of staff which would have taken place had it not been for Safeguarding, and, in a large number of industries, it has increased employment, because they have been able to produce goods at a figure which enables them to compete in the world's markets. What do we find when we are looking for markets in the world? We find that all our competitors are reducing their national taxation. What are we doing to-day? We are proposing to increase the national taxation of this country by £42,000,000. How can we hope to compete when we are faced with this heavy burden of extra taxation on industry?
When we look to the future, [...] is a very black outlook. While one does not like to be pessimistic, I think that there will be very little optimism or satisfaction to be found as long as the present Government are at the helm of affairs. I believe that the state of unemployment to-day is very largely due to the fact that large employers and smll employers are afraid to increase their works and to develop their businesses because they do not know how much, and when, they will have extra taxation thrown upon them. It is that uncertainty which is so serious for the future of this country. When the Chancellor made his speech and said that for this yer at least he was going to retain the McKenna Duties and the Silk Duties, hestill said that at the first opportunity I was going to brush them away, to ablish them. In the past we have had freigners coming over here from differed parts of the world and building facories to enable them to manufacture goes here. To-day, all that is stopped—[Interruption.] Foreigners, in the sens that they may be Americans—foreigner as far as England is concerned. The can come from Europe or America, as the case may be, but they are foreigners as far as we are concerned.
It is a very serious position. We are anxious to see that emloyés here receive as high salaries as possible. I do not think that it is necessary for the success of industry to reduce wages. I would rather see wages ineased, and social services increased won we can afford it. We could afford increasing the social services if we were epared to protect the products of our bour. If we were to levy a charge o all manufactured
goods that came into this country, we should increase employment, and the social services, which the Socialist party, and we also, support, could be maintained and, if necessary, extended.
The system upon which we are embarking to-day as a result of this Budget will, in my humble judgment, cause trade to decrease and unemployment to increase. The time will come when even the Socialist party will be forced to take other measures, so that the trade of the country can be improved. We have, on the one hand, the Lord Privy Seal advocating the increase of our export trade, and, on the other hand, Members of the Government, and in fact the Government themselves, advocating greater expenditure, and having no regard as to how we are to find the money. This Budget lacks statesmanship, and it lacks vision as to what the future of the country is going to be. I hope that the Government will try and take the view that it is not in the interests of the country as a whole to add burdens to industry.

Mr. BENSON: There have been one or two comments on the other side of the House that the speeches from this side have not in the majority been in favour of the Budget. Of course, we have undoubtedly had the wail of the bagpipes on this side. We get that no matter what Measure is introduced by the Government. The reason why there has not been so many speeches from this side in defence of the Budget is that those of us who are great admirers of the 8.0 p.m. Budget have been waiting to find some arguments to answer from the other side. I have listened carefully to the two days' Debate, and it was not until the hon. Member for Westmorland (Mr. O. Stanley) spoke that any new argument was used. The hon. Member had the ingenuity to find two new arguments against the Budget and against the Chancellor of the Exchequer. He said that the Chancellor of the Exchequer was guilty of financial purity on the one hand and of strict regard of the rules of book-keeping on the other. I fancy that the Chancellor of the Exchequer pleads guilty on those counts. No one on this side would ever accuse the right hon. Member for Epping (Mr. Churchill) in the same terms. Our present financial plight is
very largely due to the skilful way in which that ancient mariner has piloted his way between the Scylla of financial security and the Charybdis of the correct rules of book-keeping.
Most of the arguments from the other side have been old, well worn, threadbare arguments that have been more vigorously and more effectively put on private Members' Motions, that high taxation is likely to do two things, first, to deplete the fund of new capital and, secondly, to drive capital out of the country. Let us examine that contention. Is there any evidence that we are suffering from depletion of capital? I say very definitely that there is no such evidence.

Major COLVILLE: What about the iron and steel trade?

Mr. BENSON: In 1928 we had a record Stock Exchange boom. Was there any evidence of lack of capital then? Money simply flowed into the Stock Exchange for any wild-cat scheme that any promoter might put forward. It is true that at the present time and during 1929 the investor has been rather shy of industrials, and one cannot be surprised at that, after the crashes that took place in the fantastic boom of 1928. However, when anything good has been put on the Stock Exchange and anything obviously sound has been offered, it has been oversubscribed immediately. There is not the slightest evidence of any shortage of requisite capital.
One of the most extraordinary arguments was used by the late Secretary of State for War against the reference to interest rates used by the Financial Secretary to the Treasury. The late Secretary of State for War said that the investors in this country were losing confidence; that they had no confidence in the Socialist Government and that, therefore, they had taken their money out of the industrial pool to lend it to the Socialist Government. Because they have no confidence in the Government they put their money into Government funds. That is about the weight of the argument used by the late Secretary of State for War. During the present year the Bank Rate had to be put up to 6½ per cent. Why? Because other countries which were supposed to be receiving the outflooding of our capital were coming to this country to borrow
money. We were the one country that had free capital, and we had to put up the Bank Rate to prevent capital going out of the country, because other countries were offering such high rates of interest.
Reference has been made to the question of investments abroad. Of course, there are investments from this country abroad. That is no new phenomenon. It has been going on for a century. Our iron and steel trades have been built up on the export of capital from this country in the provision of railways and machinery abroad. Our iron and steel trades have been kept busy by the export of British capital abroad. In those days it was referred to as overseas investment and regarded as an evidence of the financial strength of this country, but now hon. Members opposite refer to it as capital being driven abroad on account of the Socialist Government. Hon. Members opposite have changed the description in order to beat the Socialist Government. They have been crabbing English industry and finance for all they are worth with the object of scoring a party advantage. They do not mind damaging the financial interests of this country so long as they can damage the Socialist Government.
They pretend to be a patriotic party. They are always talking about "our country." Perhaps they have more right than anyone else to use that term, for they own nine-tenths of it. They parade the love of their country, but when we come to examine it it is nothing but cupboard love. They love their country so long as they can get anything out of their country, and if they think that they are not getting enough out of their country they are prepared to scrap it and leave it, like rats leaving a sinking ship. [An HON. MEMBER: "What did you do in the War?"] It would be out of order to discuss that matter, but if the hon. Member wants to meet me in my constituency, it is open to him. We have an excellent example of the patriotism of the Tory party in the hon. and gallant Member for Rye (Lieut.-Colonel Sir George Courthope). This hon. and gallant Member has been going about the country explaining how to dodge taxation, and recommending other people to do it. He says that he has got £50,000
tucked away where the Chancellor of the Exchequer cannot get at it. He says that is a good tip to follow. That is their patriotism.

Major COLVILLE: On a point of Order. Is the hon. Member speaking on the question of the Budget? He is talking about patriotism in the Unionist party.

The TEMPORARY-CHAIRMAN (Mr. Snell): That matter was brought up yesterday in debate.

Mr. BENSON: I can understand that it is a very sore point with hon. Members opposite. They believe in patriotism so long as it pays. I would suggest to hon. Members opposite who are very worried about this Budget, that it is a good Budget and that they need not worry about it. It has been introduced by the only political party in this House that understands finance.

Major COLVILLE: Since when?

Mr. BENSON: I will not go further back than 1920. I will deal with the fundamental problem of our national finance at the present time, and that is the overwhelming debt that has had to be dealt with. In 1920 our debt was £7,800,000,000, in round figures. To-day our debt is £7,500,000,000. In 1920 the index figures of the cost of living stood at 307, and to-day they stand at 136.5. In 1920 the Labour party advocated the Capital Levy. What has happened in regard to our National Debt in the meantime? Although in figures it has been reduced by £300,000,000, if we compare the National Debt to-day to the National Debt in 1920, not upon the basis of mere figures but upon the basis of the goods and service that the holders of the National Debt securities can demand from the nation, if we take into account the increased value owing to the drop in prices, we find that the National Debt which stands at £7,500,000,000 to-day is really £17,000,000,000 on a 1920 basis.
In other words, because our financial wisdom in 1920 was turned down by hon. Members opposite, because the Capital Levy, of which the present Financial Secretary to the Treasury was so able an advocate, was rejected, we are bearing to-day two and a-half times the weight of Debt that we borne in 1920. We
are the only political party that had the wisdom and prescience to realise that when inflation was at its height, when prices were high, when money was free that that was the time to tackle the enormous burden of debt, and not leave it until prices had fallen and until the capital weight of the debt had mounted higher and higher. Burdensome though the debt may be, I am glad that the Chancellor of the Exchequer of the Labour Government is not prepared to adopt the shifts, trickery and chicanery that have marked the Budgets of the last five years but is making a serious effort to pay debt out of revenue.

Sir DONALD MACLEAN: I do not intend to follow my hon. Friend who has just spoken in many of the points that he has made, and particularly in the claim which he made that by some provision of Providence the sole wisdom in connection with national finance has descended suddenly upon the party to which he belongs.

Mr. BENSON: I did not say "suddenly." I said a long time ago.

Sir D. MACLEAN: I belong to a party which has been associated with the soundest canons of finance which any country has ever experienced. There can be no doubt that the work of the great Chancellors of the Exchequer of the past have made it possible to finance the many beneficent social reforms in this country. I want to raise my voice on a very familiar topic to me, and that is the absolute necessity of the efficient and economic administration of the finances of the country. It is a very unpopular topic but it is none the less necessary and wholesome. If we devoted our Budget Debates simply to the question of saying, "We have to find so many hundreds of millions of money and we have therefore to levy so many taxes in one form or another in order to do it," and forget the overmastering duty of administering the money which is taken from the taxpayer as efficiently as it is possible for the House of Commons to do it, we fail in one of the main duties of this House. The real power of this House is its control over the Government in Committee of Supply and in Committee of Ways and Means. It was in Committee of Supply that the liberties of the people were won from a King, and it is in Com-
mittee of Supply and in Committee of Ways and Means that the liberties of the subject must be maintained against the executive representing any of the political parties.
I want to bring to the notice of hon. Members the immense importance of the Committees which the House will find itself taking up in the course of a few weeks. This is a new House of Commons, and if I mention one or two of its duties in connection with Supply it may not be entirely inapt in the first Budget Debate of this Parliament. Excluding the Army, Navy and Air Force, the Estimates for the Civil Service, including the revenue departments, total about £360,000,000. That is nearly £1,000,000 per day. How does the House of Commons propose to deal with that? Under its Standing Orders it allocates 20 days to Committee of Supply. Three of those priceless days have already gone and, as far as I recollect, they were not devoted to that intensive examination of the expenditure of the Government of the day so much as to some topic of immediate and popular interest. There are 17 days left in which this House, in Committee of Supply, has an opportunity of discharging one of its main functions. How is the House of Commons going to keep control over expenditure? That is the most important question. We have the Public Accounts Committee which is discharging a very useful function indeed, but it deals with money which has been spent. There has been set up the Estimates Committee, which has the power of dealing with details of expenditure not yet incurred.
The position is this: The House has voted about £139,500,000 on account of the Civil Services, but probably this very excellent Estimates Committee has only sat three or four times already. I see the President of the Board of Trade in his place. He was the Chairman of the Public Accounts Committee and probably will be able to correct me if I am wrong. The first report of the Estimates Committee will deal with one or two Departments, and I am sure it will be worth the attention of all hon. Members who take an interest in the financial administration of the revenue of the country. But I do not know whether that report will be of any effective service because I do not know whether the Department
with which it has been concerned is one to which the House will give any real attention. The Estimates Committee has no power over policy, and expenditure depends upon policy. The only person who can answer for the Departments discharging their proper functions is the Minister who speaks for the Department, and policy, of course, is settled by the Government. But the master of policy is the House of Commons itself, especially in Committee of Supply and in Committee of Ways and Means. In the Public Accounts Committee if a member asks a civil servant a question—and we are all agreed that they are of the greatest service to hon. Members of the House—in some cases the reply is, "I cannot answer because it is a matter of policy." Then the hon. Member may turn to the Chairman of the Committee and ask how he can raise the matter, and the reply of the Chairman is that he can raise it on the Floor of the House.
What happens? When that particular Vote is put down very often a full dress debate arises on some other matter, like housing or unemployment, and the hon. Member who has a most useful point to put, going right down into the springs of control of expenditure, is completely shut out by speeches from Front Bench Members. That is what very frequently happens. These allotted days are very often, I will not say misused, but certainly not used for the purpose for which they are allotted. If a matter in connection with the Foreign Office is raised and the Vote is put down as the first Order of the Day it counts as an allotted day of Supply, and another opportunity for the control of expenditure has gone from the House of Commons. What I am trying to do is to bring to the notice of hon. Members who have not been here very many years that one of their most important functions is to take the keenest possible interest in the proceedings in Committee of Supply and in Committee of Ways and Means to go into the details of expenditure.
That is the only way in which the House of Commons can obtain any real control over expenditure. It is not by going in for a general debate on one or two topics of public importance but by an intense examination of the Estimates themselves that the House will retain
its control over finance. This was the practice some years ago not only on the Opposition side but also below A the Gangway and on the Government side, and there is no one associated with the financial affairs of this country who will not say that a most useful evening is spent in a detailed examination of some of the Votes. It is impossible to cover all the Estimates in one year. If the Estimates Committee is going to apply its useful functions to all the Departments it will require the full five years of Parliament to do the work. You will not get more than two or three Departments each year, and as I have said 17 of the allotted 20 days have already gone. There will be about 10 more really effective days for a proper examination of the expenditure of £360,000,000 in connection with the Civil Services and Revenue Departments.
Just a word about the Budget itself. I regard the effort of the Chancellor of the Exchequer as a very sound and courageous attempt to deal with a most difficult situation, for which he himself is not really responsible. A very large part of the aditional expenditure has been forced upon the Government of the day by Members of all parties. It is not for those who are responsible for that, whether they be above the Gangway or below the Gangway on this side of the Committee, to charge the Government with extravagance. when so many of them join in the demand which has increased the Estimates for the current year. The House of Commons as a whole should realise its duty to the country. It has not only to visualise I shall not say a popular cry, but when it seeks to remedy some injustice or to bring within the ambit of the scheme of national assistance, tens of thousands who were previously outside it, it should remember that the money has to be found, and found by the Government of the day, and instead of turning round and criticising the executive for expenditure for which the House as a whole is responsible, the House ought to remember that when a demand is made, someone has to find the money.
The person who is finding the money this year is taxing large Incomes. In the end, however, whether you tax the millionaire or the man with £230 to £300 a year, it is the largest and the poorest class in the country that has to pay.
The tax is passed on until it gets down to the poorest, who cannot pass it on any further. In the end the burden is borne by the people as a whole. That fact should be remembered when we commit ourselves to large schemes of expenditure, however humanitarian they may be. I repeat that I do not see what the Chancellor of the Exchequer could have done other than what he has done, faced as he was with a situation which was not of his own creation. He has faced his task honourably and honestly, and, as far as I am concerned, I have no alternative but to support the Budget through its remaining stages.

Major ROSS: Having listened to the most interesting speech of the right hon. Member for North Cornwall (Sir D. Maclean), I have been struck by one feature of it, which is that it would appear in one respect to cross the ordinary divisions in this House. The right hon. Gentleman referred to the importance of Supply and to the distressing way in which Supply days are taken up by Members of the three Front Benches in debating points which at the moment seem to be of importance. As I understood the right hon. Gentleman, he was leading an attack upon the Front Benches of all parties, on behalf of those on the back benches. I am sure that if he continues to do so, he will find eager supporters in every quarter of the Committee. But I prefer to go back a little further, to the speech which we heard from the Leader of his party, the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). That speech was considerably more polemic in tone. As one who is very young in the service of the House, it is always of interest to me to listen to a Parliamentarian of the eminence of that right hon. Gentleman, and to see the matchless skill with which he plays upon the feelings of the House in one way or another.
There is another interest. You never know what he is going to say. Certainly, on this occasion I think most of us were surprised to find the right hon. Gentleman appearing in the light of a purist in electioneering technique, because that was not a light in which many of us had viewed him up to that moment. We remember certain pithy phrases which he has evolved from time to time—"nine-pence for fourpence," "a land fit for
heroes to live in"—and even during the recent Election he produced a programme of the most electioneering type, which was so staggering that even his own supporters could not swallow it. It was difficult to see exactly what his criticism of the Conservative party was. He appeared—I use the word "appeared" advisedly, because it is so hard to know what he is doing—to criticise our having spent £383,000,000 on social services. I do not know whether he thinks that that is a matter on which one should have no pride, or whether he would say that the sum should be reduced. It was certainly a most original line for the right hon. Gentleman to take.
I would have liked to have heard a further exposition of his views on that topic, because if he had treated it a little more seriously he would have found himself in certain difficulties. The Chancellor of the Exchequer complained most bitterly that his predecessor's speech had not been sufficiently serious. The Chancellor's speech was serious enough. One might almost describe it as having been dismal. Certainly, from the point of view of those on whom the burden of taxation falls, there was no ray of hope. Let us take the right hon. Gentleman's own view of the situation. He himself is becoming, or perhaps has become, a star in the world of broadcasting. He broadcast very recently. He broadcast on 9th February to the United States of America, and I would like to quote his appreciation of our position as he gave it to the United States:
Our people are the most heavily taxed in the world. The average amount of national and local taxation works out at about £100 per year per family. We have an Income Tax of 4s. in the £, and a super-Income Tax running up to an additional 6s. In addition, the duties on estates passing at death range as high as 40 per cent. With such a burden as this upon our shoulders. is it any wonder that we have severe industrial depression as the aftermath of the War?
There you have the situation stated in clear terms, and the reasonable deduction that it is no wonder that we suffer from industrial depression as a result of that taxation. How does the right hon. Gentleman seek to remedy it? By increasing the taxation of which he had complained so clearly and so emphatically in this passage to the people of the United States. He puts on an addition to every form of direct taxation which he can
reach. His policy would appear to be to divide the people of this country more and more into two classes, those who pay and those who are to be paid. If you get people to believe that the burden of taxation will not fall upon them—I do not agree with the contention, because I think that the burden of taxation falls upon even the very poor through direct taxes—if people believe that they can vote expenditure in all directions without suffering and without having to pay any amount, however small, that must lead to the breakdown of government as we understand it to-day.
As to the question of how far those not directly taxed feel the effects of direct taxation, I suggest that the working people and the very poor feel as hardly as anybody else, and more hardly than many, the effects of just such taxation as is imposed in this Budget. The increase in the general rate of Income Tax is tempered to that shorn lamb the Income Tax payer on the lower income scale—that Income Tax payer whose income reaches only a very moderate total—but the limited company is not affected by any relief in this Budget. We all know how Income Tax is deducted from a limited company's profits. When there are profits, the company has to pay tax on them, and it can then declare a dividend or dividends on various classes of stock. Of course, those who receive the dividends can claim the exemptions and allowances to which they are entitled, but any sum which the company retains for its own use must pay the full amount. It is notorious that the bulk of industry in this country is carried on by limited companies. Take the case of a company endeavouring to rationalise, or to put by some reserves, or to buy new plant. If a company wishes to create such a reserve or to carry out various beneficial efforts with regard to its business, it will find it more difficult to do so under this Budget, because the amount which it will have to pay from its reserve fund goes up from 4s. to 4s. 6d. in the £.
The point has been made by the right hon. Gentleman that the taxpayer does not, in fact, pay 4s. 6d. in the £, but that a company does. That is incontrovertible. It does not get any relief, and the full weight of the additional 6d. must fall
upon a company. The help which industry gets from the money that is at the disposal of the people of the country has two aspects. One aspect, to which full weight is given by hon. Members opposite, is that of purchasing power; but there is another way in which industry receives help, and that is from the investment power of the country. Investment power must be adversely affected by the increased taxation proposed in the Budget. Not only does it affect companies carrying on business in the country, but it affects invisible exports, the money which pays for the foodstuffs imported by us from abroad. If there is less money to invest in this country, there will also be less to invest abroad, and there will be greater difficulty in paying for those things which we get from other countries.
All this must vitally affect the working-class, because they are the people who carry on these trades, and they are the great majority of the people who buy or use imports from abroad. I suggest that this kind of taxation must have a very hard effect upon them. At the same time they will get the entirely wrong impression that this taxation as it does not fall on them directly but on the Income Tax payer, is a thing about which they can be irresponsible, and they will feel that more and more sums ought to be produced in this way. Thus a very vicious circle is created.
I would be very interested to know a little more about the quinquennial valuation which is proposed. I do not know how far I can go into the details of that subject and I mention it only in a very cursory manner, hoping to get at a later stage in the Debate some further information about it. Are we to have an entirely fresh set of machinery to deal with valuations under Schedule A? Are we to have officials from the Revenue Departments going round and making inquisitorial valuations of people's property? If we are, it would seem to me to be a thoroughly dangerous principle and one which is rather foreign to the general practice of this country. What is the motive of the Income Tax official? It is to get taxes, and more taxes. Are we, then, to have prosecuting counsel, Judge and jury, all in one provided by the same Department, whose object will be to get the largest amount of money
out of the people who have to pay under this Schedule?
If we are going to revise the powers of the Revenue Department in that direction, I think it is a most unfortunate move for the Government to make. [HON. MEMBERS: "For whom?"] For every one the present system of valuation, to my mind, works tolerably well. At all events we do not, under the present system, regard the tax-gatherers, even the humble officials of the Income Tax Department, as the publicans were regarded in classical days, when they of all people were, we read, held in the greatest abhorrence. I should be sorry to see the introduction of a principle which in the past has created many evils including that of the farming of taxes, a system under which interested parties tried to screw up the amount of money obtainable from any individual. I wish to speak on the subject of the Duties of a protective nature which have been mentioned in the course of this Debate. First there are the McKenna Duties and the Silk Duties, and I am tempted to quote a line which seems to me rather appropriate in this connection:
Honesta quaedam scelera successus facit."
[HON. MEMBERS: "Hear, hear!"] I had hoped, and I am not disappointed, that I should at last after many years receive some slight tribute to my erudition. Such a thing has never happened before. That line to the effect that "success makes some sins honest" surely, expresses the view of the Chancellor of the Exchequer towards these Duties. It is a line from Seneca, a most respectable old Roman, who resembled the Chancellor of the Exchequer in some respects, and who had the same austerity of life and appearances. He also fell into had company, and he produced many tragedies, though none so great, I think, as this Budget. We find the Silk Duties and the McKenna Duties put on an entirely different level from those which are not so productive of funds in the form of Customs, and that is looking at protective duties from one point of view only—as a revenue-raising piece of machinery. Surely that is entirely wrong.
One must look at protective duties from two points of view. The first, and to my mind infinitely the more important, is that they may provide more employment
for our own people, and the second is that they may incidentally produce revenue. If we were to look at them from the angle at which they appear to be looked at by the Government, and that is that their object should be solely to produce money, what would be the logical conclusion, what would be the ideal? It would be that they should produce as much money as possible, that all our motor cars should come from abroad, and should all pay duty, and that all our artificial and other silk should be imported and that it should all pay duty. The consequence of that would be that many people over here would be thrown out of employment. Hon. Members can reckon it up for themselves, and they can see, surely, that this way of considering the question is illogical and absurd and, if it is applied to the affairs of this country, disastrous.
The right hon. Gentleman has congratulated himself, in his rather lugubrious Budget speech, upon one thing—that there will be no deficit at the end of the year. As to that, I think he may be a little optimistic. If one takes his estimate of Income Tax and Surtax at the old rate, before there was any additional 6d. on the Income Tax and before the additions to the Surtax, he budgets for an increase of £2,184,000 over the amounts actually collected last year. At it seems to me, in these days, with trade falling and unemployment rising—and although to-day one was very glad to see a slight decrease in the total of the unemployed, one was equally distressed to observe that there was an increase of 10,000 among those permanently unemployed—is not the right hon. Gentleman a little optimistic in using the ordinary rule of thumb, which he appears to have done, in calculating his increase in the next year, particularly in view of the fact of an increased rate being charged?
Then, again, he budgets for an increase of about £1,000,000 in the Post Office profits, though they have increased considerably in recent years, but in my opinion, to use the Post Office as a revenue-producing piece of machinery is unsound, because then you cease to think of it less as a public service than as a Government monopoly. We should think first of all of its service to the public, and only secondarily of the profits which
it can make thereby, because it is a charge upon the people of this country, and upon the people of all classes, those in business and those in private life; and I rather regret to see this continued inflation of the estimated profits which it is expected to produce.
There is one peculiarly adroit feature of this year's Budget. No provision whatever has been made for any replacement of the standard of the Navy which we appear to be going to have after the Three Power Conference has been concluded. I am not going to touch upon the proceedings of that Conference in any detail, but I would deal with the situation as it emerges from the Conference, when we shall have a fleet of a limited size. It has been enunciated that ships are to be limited in age to 16 years if they are between the sizes of 3,000 tons and 10,000 tons. If that is so, if our cruiser fleet is to be kept modern and not out-of-date, we ought to have laid down about 20 ships this year, but as it is we have laid down none. The result of this ingenious device is that any Government that feels it a duty to keep up, at any rate, defences for the needs of the country will have the duty of replacing these worn-out ships which should have been replaced by the present Government; and so they will be driven to an increased expenditure, and a chorus of hon. Members opposite will have the exquisite pleasure of complaining about the increased burden of armaments.
There was one phrase which the Chancellor of the Exchequer used that struck me as a very curious one. He said that the Income Tax payers were to contribute to the needs of the State in proportion to the benefits which the State had conferred upon them. There is no class with whose interests the State, as exemplified by the present Government, appears to be less concerned, but there are many classes to whom they have given direct benefits, and those are just the classes whom the right hon. Gentleman is careful not even to charge some slight extra amount on such things as beer or anything of that nature, which he would admit was not a luxury. I can hardly imagine that anyone here expected to have a Budget which would be greeted on all sides by such extreme gloom as that which we have had induced by the Budget of this year.

Mr. MacLAREN: I was much amused listening to the last speaker, whose meticulous care for the prodigality of the Treasury Department of Great Britain was interesting. I looked up to see what part of the Empire he represented in this House, and I find that he comes from Londonderry. I happened to turn up the Blue Paper which was issued to Members on Monday, and I noticed, "Payments to Northern Ireland Exchequer, £5,400,000." I think that the Northern Ireland Government was pledged to contribute to the State £8,000,000 a year, and I have been looking in vain for that £8,000,000 ever since it was promised.

Major ROSS: if the hon. Gentleman will look it up, he will see that we are taxed exactly as his people are taxed, and that the entire product of our taxation is a little more than the amount which he has mentioned. Are we to give it all to his people?

Mr. MacLAREN: I was merely saying, in reply to the hon. and gallant Member's meticulous examination of our conduct on this side of the Irish Sea, that we have a promise from his particular part of the Empire of £8,000,000 a year, which has not come. I pick up the Blue Paper, however, and I find that the Government of the hon. and gallant Gentleman, who is so much concerned about the squandering of our money in this country, are taking £5,400,000 this year. I advise him to stay at home and use his meticulous, precise examining mind in that lovely new Parliament, which we are building for him at a cost of £1,000,000 cut of the £8,000,000 which they owe us, and the next time that the hon. and gallant Gentleman comes to this House with that audacity which is born of a man who neglects the area which he represents, to be quite sure that part of the £8,000,000 arrives to support him—

Major ROSS: On what ground does the hon. Gentleman say that I neglect the area which I represent? I come here to protect my people against the people whom the hon. Member represents.

Mr. MacLAREN: With the best will in the world, I am giving the hon. and gallant Member advice—

Major ROSS: Give us Safeguarding, and that may be of some use.

Mr. MacLAREN: The best safeguarding that our Exchequer can have is to see that that £5,400,000 will not go to Northern Ireland next year, and that that £8,000,000 will come over here. I advise the hon. and gallant Gentleman to take that little bit of truth home with him to his pantomime Parliament. It is tragic how things are conducted in his part of the Empire. Let me come to the main current of the Debate, which is becoming rather dull. The hon. and gallant Member for Warwick and Leamington (Captain Eden) this afternoon warned the Chancellor of the Exchequer to have some regard to the ultimate effect of taxation upon the heavy incomes. He said: "You pride yourselves on the fact that you are imposing heavy taxes upon particular shoulders, but have a care unless the imposition should escape the shoulders, and slip on to somebody else." In case he should walk right into what would be a fallacy, from the Tory point of view, but what would be a truism from our point of view, I interjected, and asked him this question: "You postulate that all taxation ultimately is paid by the working-class in this country?" He saw whence I was driving him; I was only driving him along the road of his own deductions; and he drew back, and said, "I mean industry." That argument was reinforced by the right hon. Member for North Cornwall (Sir D. Maclean), whose speech was of great use to Members of the Committee. He said rightly: "All taxes, call them by any name you like, are ultimately paid by the 9.0 p.m. workers, by the producers of wealth." Whether it be Income Tax, or Super-tax, or whether we devise new names for new taxes and impose them, finally all taxes imposed upon the value of human products are paid for by those who produce the products. I am glad that the right hon. Gentleman the Member for North Cornwall reinforced that truism, because it seems to have been forgotten by the enthusiasts who think that there is a road to salvation through forms of predatory taxation. There is an opinion in almost every part of the Committee that if you see a man of wealth, you should get after him and tax him out of existence. It is an entirely fallacious theory, and one pursued persistently by the Conservatives, although they denounce it. I should like to drop a hint. If it be true that all
forms of taxation levied on the value of human products are finally paid by the prodcers of wealth, namely, the workers, it is incumbent on the Committee, if it be composed of men who claim to understand these question's, to try and find out if there be some form of taxation which can be taken by the State without impinging upon the wages of the working classes. [Laughter.] I have seen these smiles before when a lone apostle has been talking about—I shall not say what, but, although it has been put into cold storage for a month or two, as sure as I am here, it is coming into this House again.
The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) got back to his old form this afternoon, and gave us a speech which was devastating and highly amusing. I noticed that he reiterated an old fallacy which has haunted his mind for years. I relished, as every Member of the Committee relished, the reproach which passed across the Gangway when he reminded the Conservatives that they were more enthusiastic State Socialists than any Member on this side. At the last Election, I had a Conservative and a Liberal opposed to me, and I found that I was more Liberal than the Liberal, and that it was an easy job to reply to the Conservative by pointing out that in the last Administration they imposed more State control than the Labour party did in 1924. The right hon. Gentleman the Member for Carnarvon Boroughs reiterated what I deem to be a certain fallacy in his mind. He said that, in taxing, we should not be concerned so much as to the form of taxation, as to the expenditure of that taxation. That is a form of thinking of which he had better rid himself.
I have never known, that Divine Providence has imposed on any Government more wisdom as to how money should be spent than the person who creates the wealth or the money, and I can well see that, if you run along this line of theory, some beneficent group of gentlemen may say, "Do not mind how we tax you, for we have the wisdom to know how to spend it, although we may tax you into the poorhouse, and by our wisdom pay something to get you out of it again." It is of the greatest importance how you impose taxation. It is not too much to say that the problems besetting
this House to-night have been created and perpetuated by the vicious forms of taxation persisted in by successive Governments. With all respect, I do not agree with the Financial Secretary when he said in reply to one of my hon. Friends that the Budget was not an opportunity for discussing social reform. His exact words were:
The Budget is not a scheme of social reform … It is a Resolution introduced in a Committee of Ways and Means, with the intention of finding out how to raise the revenue."—[OFFICIAL REPORT, 15th April, 1930; col. 2847, Vol. 237.]
It is very interesting that this should have been said, because it is the Budget which determines policy and how far we can travel in our policy for the next 12 months. The Budget will overshadow the actions of the Government who introduced it. We on this side have suffered from the fact that the late Government went out of office immediately after introducing their Budget. It is not too much to say that we of the Labour party have been hung up until we could get our own Budget. We were held in by the Budget we had received, and it is the Budget which has been launched by this Government which will determine how far the Government can go in carrying through their policy in the ensuing 12 months. A thorough appreciation of the effects of taxation upon policy and upon Governments would have removed from the mind of the Financial Secretary the idea that when we are discussing a Budget we are not at the same time discussing high policy. I had intended to make a long quotation, but I will not weary the House, but almost every authoritative writer on economics before the Physiocrats in our time warned successive States and statesmen that taxation would determine the success or the retrogression of a State; that taxation can either raise a State or can destroy a State. Therefore, I say now, though not in a spirit of carping criticism, that the Financial Secretary should not have advanced that argument because it is not true.
The right hon. Member for Carnarvon Boroughs said something with which I entirely agree. He said he regretted that the land valuation had not been tacked on to this Budget. No one was more disappointed than I was to hear that
passage in the Budget speech in which it was said the valuation was to be made the subject of a separate Bill. The House of Lords will be lacking in tactics if they do not oppose the valuation Bill with all the venom with witch they opposed the 1919 Budget. It would have been a good thing if the Chancellor of the Exchequer could have fund some excuse to incorporate the valuation in his Finance Bill, so that we could have more speedily arrived at the valuation. However, I am not altogether disappointed, because from experience of the operation and administration of the taxation of ground values I would rather have a perfect valuation and no tax than a tax with a faulty valuation. In Australia, in the United States, and even in Denmark many of the attempts at this taxation were made abortive in their first stages by imposing the tax on a valuation which was not correct. Therefore, perhaps it is just as well to wait a year and get a perfect valuation.
I will not go into all the ramifications of this Budget. Frankly, I do not feel enthusiastic about any of them. It is a traditional Budget, it is a Budget in which the wealthy are to be asked to pay more and those who are not deemed to be very wealthy are to be asked to pay less. I hope the time will come when a Chancellor of the Exchequer—and I am quite sure the present Chancellor of the Exchequer may be that man—will see that it is not the function of Governments to distribute the wealth produced by society, but than it is the function of Governments to remove the injustices which create a condition of society in which one man can be a millionaire and another a bankrupt. No wise and beneficent Government can ever hope to bring about a just distribution of wealth by fanciful budgetry or fanciful ideas of taxation, and I hope that next year the Chancellor, then one step removed from his first attempt at a Budget, will have a freer hand and that the valuation will be an accomplished fact.
There seems to be some comforting philosophy in the Conservative ranks that the valuation will be opposed in the House of Lords, that it may be held up for two years, and that it will take so long to complete that this party may be out of power before an attempt is
seriously made to impose taxes upon that valuation. I want to tell those enthusiasts for the destruction of the scheme which I am after that the valuation of 1915 is still in Somerset House. That valuation has from time to time been renewed, and probate duty has given the valuers in that Department a pretty fair idea of how values are rising and falling in various parts of the country; and I have no hesitation in saying that, if the Chancellor of the Exchequer is empowered to give instructions to the Department, the valuation could be brought up to date and made complete and ready for the Budget next year—if that is any consolation to hon. Members opposite! They know as well as I do that once we turn our minds from taxing industry, that once we divert taxation, which, as it has been truly said, is really borne by the working classes, from industry and levy it upon the historic monopoly of
land value—[Interruption.] Ah! they know as well as I do when that begins speculation in land will begin to stop. If there are any Members in the real estate business, let them mark my words!—when this suggestion of a valuation has to be taken seriously the speculation in land round London and all the big cities in the country will stop. Even the suggestion of the tax will stop speculation, so we can picture what will happen when the tax comes on top of the suggestion.
I am not as enthusiastic as I would have been had I heard that this year, 1930, we were to start again on the road which the right hon. Member for Carnarvon Boroughs at one time made us believe we were about to enter on—though it may be providential that we are to wait for another few months—but I know I am speaking the mind of almost every Member on this side and on the Liberal benches when I say that if the Chancellor comes to this House with a Valuation Bill we will give him every assistance. We will drive it through the House of Commons. And when it goes to the other place, if they attempt to do what they did in 1910, no one will welcome that more than I shall, because it was that fight which removed their power of control over taxation in this country. Let them challenge us again on that ground, and I will welcome it. It will be a rallying cry in the country that will bring us back, not holding office without power, but as a real power.

Mr. ARTHUR MICHAEL SAMUEL: You have to get over your unemployment figures.

Mr. MacLAREN: My hon. Friend says that you have to get over the unemployment problem. Unemployment will haunt the Government until we remove the causes of unemployment, but I will not go into that question now. If the land of England were free, and England were not in the hands of monopolists, if the people were cultivating our own land instead of going to Canada and other countries, if, indeed, the finest agricultural land in the world was, to use the words of the late Sir Henry Campbell-Bannerman,
more the storehouse of the workers, and less the pleasure ground of the rich,
unemployment would not be overburdening us to-day. It is for that reason that I am anxious to seize every opportunity of urging the Government to deal with these questions. It is for that reason, and that reason only, that I am enthusiastic in fighting this principle in this House and outside. That is the reason why I find pleasure in supporting the Chancellor of the Exchequer in his Budget, and I wish his policy God-speed during the next 12 months.

Mr. GREENE: Some four and a-half years ago I twice addressed this Committee at some length on the subject of the Safeguarding of the gloving industry. During those discussions I described the conditions obtaining and pointed out that unemployment was rife, that those engaged in the glove industry were working short time, and that no cutter apprentices were being engaged, which meant that before long gloving would be a lost art in this country. I made various statements, and certain prophecies upon those occasions which were derided by the hon. Member for Rochdale (Mr. Kelly). Some hon. Members may recollect the wordy warfare we had on that subject on one or two occasions. I wish the hon. Member were here to-night in order that I might tell him what had been the result in regard to those prophecies and that I might have had the pleasure of saying, "I told you so." To-night I rise in order to make a protest against the Government allowing the Safeguarding proposals which are now in operation to die. I should like to recall to the Committee the fact that, as
the result of Safeguarding, our retained imports have gone down by no less than 50 per cent, and our exports of British made leather gloves have gone up by 28 per cent.
In this connection I would remind the Chancellor of the Exchequer that when we discussed this question on the occasions to which I have referred, the right hon. Gentleman actually prophesied that if we were to keep out foreign gloves, those articles would be sent to our markets abroad, and would kill our export trade. Tonight I am in a position to tell him that our exports of leather gloves have gone up by 28 per cent. Of course, I am talking only of leather gloves. What is more important is that our total output of leather gloves has actually doubled since the introduction of Safeguarding. As for the price of these articles, we were told by hon. Gentlemen opposite and hon. Gentleman below the Gangway that to put a duty on foreign gloves would force up the price of British gloves. I am glad to be able to inform the Committee that there has practically been no variation in the price of gloves, and, if there has been any variation at all, it has shown a downward tendency.
Now I come to the most important point of all—unemployment. Since Safeguarding has been introduced in the leather glove industry, employment has gone up in that industry by no less than 60 per cent. That is a most important fact which should be made known throughout the country. Safeguarding has given more employment, it has increased our export trade, and it has not put up the cost of the articles manufactured. Another point to which I would like to draw the attention of the Committee is that the demand for cutters is greater than the supply, and that whereas, before Safeguarding, no cutter apprentices were being taken on, since Safeguarding they had been taken on in dozens. About four and a-half years ago the industry was working short time, but now, taking the industry as a whole, full time is being worked. I am, of course, including the holidays as well, but even with the holidays taken out, the average time worked in the
leather glove industry would seem to have been overtime.
I have confined my remark s to the leather glove industry, but I can assure the Committee that the figures with regard to fabric gloves are even more amazing and more favourable. I would like to ask the Chancellor of the Exchequer, what useful purpose will be served by letting Safeguarding lapse? When it was brought in, it was a message of hope to thousands living in the houses and cottages of the poor. It has done immense good to thousands. It has done harm to none. I submit that to let these most beneficient duties die is a piece of cruel, criminal folly.

Mr. MORLEY: I have listened with considerable interest to the observations made to-day and yesterday by Members of the Opposition, because I recognise how closely the Chancellor of the Exchequer, in his statement of Budget policy yesterday, kept within the traditional canons of taxation, and how careful he was to make the incidence of the new taxation which he proposed extremely equitable. I was very curious to see what opposition hon. Members could bring against the Budget, and, after a careful examination of their speeches, I find that their arguments are confined to three points. In the first place, they say that we are increasing taxation in this country at a time when the United States, France and Germany are reducing their taxation. I would like to point out that the conditions, so far as taxation is concerned in this country, are not comparable with the conditions of taxation existing in the United States. France and Germany. The United States came into the War very late. Her internal debt, as compared with her total population and natural resources, is a much less burden than our internal debt. So far as Germany is concerned, she got rid of her internal debt by inflation, and France got rid of her internal debt to the extent of three-fifths by inflation. Instead of pursuing the policy of deflation, France, in order to stabilise her currency, pursued the more sensible course of devaluation.
Therefore, the financial circumstances are entirely different from those with which we are faced in this country. Un-
less hon. Members opposite are willing to embrace the policy of inflation in order to reduce the capital value of the National Debt, there is no validity in a comparison of our taxation with the taxation of France, Germany or the United States. The second main argument brought forward by Members of the Opposition was that this increased taxation is going to prove a burden upon industry. That argument has been repeated in almost every speech which they have made, but, although they have constantly said it is going to be a burden, they have never attempted to show how it would be a burden. They did not fortify their general statement with a single specific proof.
The fresh taxation imposed by the Chancellor in the Budget can only be a burden if it does one of three things: either it must increase cost or increase prices, or so entrench upon savings as to lessen the amount which is available for fresh capital expenditure. Nobody opposite will argue that an increase in the Income Tax or Super-tax is an element in the cost of production, because taxation is not levied until the income emerges as the result of production. Nobody who really examines the facts can argue that an increased Income Tax or Super-tax is going to lead to an increase of prices. After all, there is an authoritative statement on that matter in the report issued by the Colwyn Committee. The Colwyn Committee was a non-partisan committee comprising representatives of all political parties, and it took evidence from successful business men, administrators, and expert economists. Its conclusions cannot be ignored, and in this matter of Income Tax and Super-tax their conclusion was that such taxes, except in very rare instances indeed, did not enter into prices. Therefore, we are justified in concluding that the increased taxes proposed by the Chancellor of the Exchequer in his Budget are not going to increase prices to any considerable extent, if, indeed, at all.
The hon. Member for East Aberdeen (Mr. Boothby), in a very eloquent speech yesterday evening, said that the taxes proposed in the Budget would increase the general level of prices. As we know, the hon. Member is a student of economics, and he knows very well the general level of prices is determined by
the amount of commodities in the market in relation to the amount of currency and the rapidity of the circulation of that currency. Will anyone argue, and would the hon. Member for East Aberdeen argue, that there is anything in the Budget which is going to increase the amount of currency in circulation or the rapidity of the circulation of any such currency? If he does not, then it cannot increase the general level of prices, and cannot have a baneful effect on industry in that direction. On the other hand, the hon. Member who spoke first in the Debate this afternoon from the Conservative benches put forward exactly the opposite argument. He did not argue that the Budget would increase prices, but that it would reduce prices. Hon. Members cannot have it both ways at once. They cannot argue in one and the same Debate that the increase of taxation is going to increase prices and at the same time reduce them. The two arguments cancel out one another.
The only other method in which the taxes imposed in the Budget could really harm industry would be if they so decreased the amount of savings available as to impede the furnishing of fresh capital either for the renewal of existing capital implements or for the erection of fresh capital implements. The average amount of capital saved during the past six or seven years in this country had been in the neighbourhood of £500,000,000 per year. Surely no one will argue that the imposition of additional direct taxes to the total extent of £42,000,000 in a year is going to have a serious effect on a supply of capital which amounts to £500,000,000 per year?

Mr. HAMMERSLEY: Would the hon. Gentleman be good enough to give the authority for his statement that the annual amount of capital saved per annum is £500,000,000?

Mr. MORLEY: I am quoting from the estimate made in the Colwyn Committee's Report. The hon. Gentleman will find it either in the third or fourth chapter, I am not certain which. That is proof that the annual savings are in the neighbourhood of £500,000,000 a year, and this increases in taxation of a direct nature to the extent of £42,000,000 a year, cannot surely have a very far-reaching effect as far as national savings are concerned. Then, again, it has been ignored through-
out the whole of the Debate that a great part of these taxes which are taken from the Income Tax and Super-tax payers goes back again into the pockets of those very taxpayers. It is paid over again to those taxpayers in interest on the National Debt. Something like £350,000,000 a year is paid to the Income Tax and Super-tax payers in the form of interest upon National Debt securities, and that repayment of capital is available for fresh capital issues and investments.
I have come to the conclusion, after a survey of the whole matter, that the argument that increased direct taxation—up to a certain extent, of course—is going to put, a burden upon industry, has not been proved in any of the speeches delivered by hon. Members opposite. The right hon. Gentleman the Member for Sevenoaks (Sir H. Young) made a speech last night which I think was remarkable both for the fluency of its delivery and for the literary nature of its phraseology. In the course of that speech, the right hon. Gentleman said that we were laying the whole of this taxation upon a small class in the community. It is not our fault if we are taxing only a small class of the community; it is the fault of the existing distribution of wealth. Wealth is so distributed in the community at present that it is only a
small number of people, unfortunately, who have incomes which are worth taxing from the point of view of the yield which is got from them. The right hon. Gentleman the Member for Sevenoaks was not really directing his argument against the Budget when he made that statement, but against the distribution of wealth which is the result of our capitalist system. He went on to say that the rich were a particularly defenceless class in a democracy. They are very far from being defenceless. They have the armour, the buckler, and the weapon of their wealth. When they are wealthy, they can buy newspapers and suborn public opinion by hired journalists, and they can buy brains for their service. It would have been much better to have said that democracy was more or less helpless against the rich, although fortunately they are showing some signs of enlightenment in these latter days.
It has been argued by hon. Members opposite that we ought to reduce expendi-
ture. What expenditure do they propose to reduce so far as the annual national Budget is concerned? The chief item of expenditure in the Budget is the service of the National Debt. That. accounts for nearly one-half of the annual national expenditure. What do they propose? Are they in favour of repudiation of the National Debt? Will they support us in the advocacy of a capital levy to get rid of the capital value of the National Debt? Are they in favour of a reduction in the rate of interest payable upon National Debt securities? They are, of course, in favour of none of those things. Therefore, so far as the National Debt is concerned, they have no remedy to put forward for a reduction of the burden of interest payable upon it. On the contrary, they have decried the method adopted by the present Chancellor of the Exchequer, of pitting by a fixed sum every year for Sinking Fund charges. They state that that will have a deflatory effect which will be inimical to industry.
The next great form of national expenditure is expenditure upon the armed Forces of the Crown. Are hon. Members opposite willing to reduce the expenditure upon the armed Forces of the Crown? If so, they will find us willing auxiliaries so far as that is concerned. The rest of the expenditure is expenditure upon social services, and there, I presume, is where hon. Members opposite would like to see a reduction in our national expenditure. Although they have rot told us during these Debates how they were going to reduce our national expenditure, they have said that they propose to finance expenditure, not by direct taxation, but by the imposition of a general tariff, and now we know the root of the enthusiasm of hon. Members opposite for Tariff Reform. They are enthusiastic for Tariff Reform because they see in it an instrument by which they can take taxation off the incomes of the rich, and place it on the food of the poor.
We have a different idea of taxation from that held by hon. Members opposite. They seem to regard all direct taxation, and, indeed, taxation of all kinds, as an evil. There is not an economist of repute in Europe who would subscribe to that view. It all depends upon whom you tax, and what you do with the yield of the taxation. If you tax the food
of poor men and women, and use the proceeds to build battleships or to finance officers' training corps, such taxation is, indeed, a bad thing; but if you take the surplus wealth of rich men and use it to increase pensions, to increase unemployment pay, to improve our social services, that taxation is good. It is good because it. increases the sum of human satisfaction, and because it increases the purchasing power of the multitude. It is good even so far as rich men, are concerned, for we have been told on the highest possible authority that a rich man shall hardly enter the Kingdom of Heaven, and the Chancellor of the Exchequer, in relieving them of some of their superfluous wealth, is helping the rich along the road to spiritual salvation.
I welcome this Budget as a moderate and sensible attempt to secure a better distribution of the existing wealth of this country, and to use some of the superfluities of the rich to improve the social services of the poor. I think that the effect of the Budget, by bringing about a better distribution of wealth, will be to lessen envy, which is the parent of faction, which in the end, if allowed to run its full course, must be destructive to the State. On these general grounds I support the Budget, and hope that it will be succeeded by others in the next two or three years of this Government's tenure of office, embodying the same principles, but carrying them still further

Mr. HAMMERSLEY: Within the time at my disposal it would be impossible for me to deal even cursorily with the pontifical and, indeed, dictatorial economic views put forward by the last speaker. We have, in the course of two days, reviewed the general provisions of the Financial Resolutions very thoroughly, and I do not propose to repeat the various arguments which have been put forward from these benches. It has remained for my right hon. Friend the Member for Epping (Mr. Churchill) to point out that, in considering these Financial Resolutions, we have to have regard, not only to particular economic and financial views, not only to political views, but also to the circumstances of the country at the time. If, indeed, this country were prosperous, if we had a rising price level, it might very well be that the proposals of the present Gov
ernment would be advisable; but when the country, industrially speaking, is suffering from a crisis and is in the depths of depression, when we have a continuous fall in prices, which even now is extremely steep, it seems to me that taxation of this character may well become embarrassing.
The Chancellor of the Exchequer himself has said that primarily it is only from trade and commerce that revenue can be derived. If, however, we examine the really basic trades—the iron and steel trades, the coal trade, and the textile trade—we find that not only are they not prosperous, but they are not making any profits. The party opposite will quite properly point out that, in circumstances in which these trades are not making any profits, you cannot by means of these proposals increase their burden. This £44,000,000 of extra taxation has to be derived from some source. It is agreed between all parties in the House that it cannot come from these basic trades. because they are not prosperous. A certain amount of it will come from the more prosperous luxury trades, but on the whole it must come from private individuals and from the financial resources of the community—from what the Socialist party would call the comparatively wealthy few. We have to ask ourselves, from a national point of view, if we did not take this £44,000,000 from these comparatively wealthy few, what would they do with it? A certain proportion of it might be spent in luxury expenditure, but the vast proportion would be available for investment in the basic trades of the country, and the first point that I want to make is that these proposals materially diminish the funds available for permanent investment in industry.
I would like to connect that point with the declared policy of the Government with respect to the basic trades. They believe that the future of the basic trades is going to be ensured by rationalisation. Rationalisation cannot be brought about in these industries except through the nexus of finance. We have to bring more finance into these depressed industries in order to rationalise them and bring them up to date. Therefore, these proposals are diminishing that financial reserve which the Government themselves would like to see in order that these basic
trades may be rationalised. If these proposals should mean that the return to outside financial interests is going to be decreased, then the productive industries would have to offer more, and, if they have to offer more, they may not be able to provide it. If they cannot offer more to the financial interests, they will not get their rationalisation, mills will be closed down, and increased unemployment will result.
A second and minor consideration is the question of the policy of the Government with regard to cheaper money. On the face of it, it would appear that a policy of cheaper money would be of benefit to industry, but is that so? The policy of the Government is to reduce the supply of Treasury bills, and by so doing to lower the discount rate. A lower discount rate is rendered effective when there is no effective demand for money for industry, but industries as a whole get their money, not from the money market, but from the joint stock banks, and, when the discount rate goes down, the Bank rate, which has followed the discount rate, is not effective as far as the joint stock banks are concerned, below a certain minimum rate. You borrow your money and you pay either 1 per cent. or ½ per cent. above the Bank rate, with a minimum, in the majority of cases, of 5 per cent. It, therefore, follows that this artificial restriction, with its consequent artificial reduction in the price of short-term money, is not reflected in any lowered cost of money to industry, because of the operation of the minimum Bank rate. Industry itself does not benefit in this way. The person who benefits is the importer of manufactured goods, who deals on bills and who is able to get at the prevailing discount, money to finance his operations as low as 2½ per cent.. when the productive industries of the country do not get any advantage.

Mr. HAYCOCK: I should very much like to follow the remarks of the last speaker on banking and credit and associated problems. To a certain extent I believe he is right, but I believe there will be no way out until we are able to control the funds of finance. I do not believe it is good enough for all these particularly potent items of commerce to be controlled by a bank court over which
we have no control. Although I am tempted to follow the hon. Member, I will go back to the notes I have been trying to get rid of all the evening. I have to compress my remarks into tabloid form, because I must keep my promise. First of all, to put it in the fewest words, the taxation suggested is emphatically not a tax on industry. It is a tax upon profits, and no one will pay until the money is made. High taxation of profits does not mean bad trade. If all the remarks which have been made by hon. Members opposite are true, then ever since 1920 everything in the commercial world should have been love1y, because taxation has been lessened.
I am not satisfied with the Budget. I do not believe it will injure trade. I do not think it is a terrible thing to tax a particular class, but it is a terrible thing to tax the working classes, who are least able to afford it. I know that the rich, those who are enjoying an income of £10,000 a year, are more than twice as well off as they were in 1920, because of the reduction of taxation and the increase in the value of money. The super-rich are very much better off, and the super-poor are very much worse off. The super-rich may compel my sympathy, but I am enormously more sorry for the miners and for the cotton weavers. I would rather be a Super-taxpayer under the new Budget than be a Miner or a cotton weaver. Someone has to pay. Either the rich or the poor have to pay if we are going to make both ends meet.
The suggestion is that we ate going to reduce taxation. On what? I want to know the modus operandi. I want our friends opposite to tell us upon what we are going to reduce. Are we going to reduce on widows' pensions or unemployment insurance? Where are we going to cut down the Bill? Give us a programme. Tell us how, and do not indulge in vague platitudinous statements about petty expenditure. Tell us exactly how it is to be done. This is where I disagree with the Chancellor in his very excellent Budget up to a point. I am hoping that next year's will be much better and the year after much better, and the year after that better than that. We are told this increase of Taxation will affect thrift. Thrift is supposed to be a great virtue and we are dependent on our people saving money. We are short of money. If thrift is such a good thing, and
if the nation ought to save, and we ought all to save, let us see where we should be landed if we followed that pertinent advice. Suppose that we all started saving. Hard up as I am and all the rest of it, I have got to save. I could save a lot. It is not at all necessary to spend anything upon tobacco, and the Chancellor of the Exchequer can tell you that you would be very much better off if you did not spend anything on beer. We are going to be very thrifty now. We are going to spend no money on tobacco or on beer. Any doctor will tell you that tea is not good for you. We do not require to use any tea. We do not require any coffee. Water is an excellent beverage. Many doctors will tell you we do not require to eat any meat. We can wear a lot less clothes. Supposing we all start to economise. Suppose that we all take the advice of the right hon. Gentleman the Member for Epping (Mr. Churchill). If we do not buy any more clothes for a year and cut down our food to oatmeal and practice the virtues of Samuel Smiles 100 per cent., we are all broke within a month. There is a great deal of nonsense talked by people who enjoy big reputations about thrift. If we all became thrifty and produced more stuff than we are going to use, your economics are fit for a lunatic asylum and not for the House of Commons.

Major ELLIOT: We must all regret that the exigencies of time prevented us from listening longer to the hon. Member. I understand his interesting speech is the result of compressing his remarks in tabloid form. All I can say is that sometimes, in listening to speeches in this Debate, I wish a similar compression had been applied. Approaching the end of a long argument—after all, it is only the main lines of argument which can stand out in such a cataract of discussion as has poured over the Budget—one thing stands out most clearly, that nobody likes the Budget which the right hon. Gentleman has produced. [Interruption.] It is quite true—nobody likes the Budget which he has produced. The hon. Member for West Salford (Mr. Haycock) expressed his dislike of the Budget, but hoped that the Chancellor of the Exchequer would break the pledges which he gave in the concluding paragraph of his speech, and would proceed to the heightening of taxation because, as he
explained, there was nothing the matter with taxing a class, and no reason why taxation should not be put higher. The hon. Member agrees. He must settle that matter with the Chancellor of the Exchequer, because the right hon. Gentleman by no means shares his view, or, at any rate, gave the Committee to understand that when he was finishing up his very interesting Budget speech.
There was only one person who was pleased with the Budget as it stood, and that was the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), up to a point—up to the present. He said that all the expenditure is justified, but it must stop now. All the health services are good, but they must not be developed any more. Unemployment Insurance is a grand thing, and we are fully justified in all the expenditure which hon. Gentlemen opposite and hon. Members below the Gangway pressed upon the Chancellor of the Exchequer, but it must stop now. The time has come to call a halt. That was the fundamental note of the speech of the right hon. Member for Carnarvon Boroughs. On that, certainly, he will find great difficulty in travelling very far along the road of hon. and right hon. Members on the other side of the Committee. The right hon. Member for Carnarvon Boroughs went further. He produced from his pocket, or from his archives, a number of leaflets, one of which wag printed in red, and which he seemed to think gave it a peculiar virtue. I also was looking in my pockets, and came across a leaflet printed in blue, if the colour in which a leaflet is printed is of any importance. There I found that the right hon. Gentleman and his party had been denouncing our party and our Government for the very same crimes of which he subsequently acquits us, and then proceeds to accuse us of having done something opposite. It was not an accusation that we were developing social services, pensions, education, health services or housing.
We remember very well the accusations which the right hon. Gentleman launched against my right hon. Friend the Member for Epping (Mr. Churchill) of robbing the feathers from the sick man's pillow. It was urgently necessary that we should explain our intention and publish it to the world. The expenditure which we put on
did not lead to any of the deficit of the Chancellor of the Exchequer or the party opposite. We were able to finance out of revenue and deal with the expansion of those services. It is not true, and never has been true, that the policy of the party to which I belong is a policy of grind and a policy of curtailing every kind of social expenditure. We consider that our social expenditure is of a much better kind than that indulged in and developed by hon. and right 10.0 p.m. hon. Members opposite with the assistance of hon. Members below the Gangway. We consider that the Widows' Pensions Act, which gave pensions to widows with young children, was a better scheme than the pension which was distributed according to some computed formula of what the widow's late husband might have been engaged in many years before. We sought, in regard to the proposal for dealing with the genuinely seeking work, some protection for the Unemployment Insurance Fund. The sweeping away of tests and the expansion of a scheme to the unlimited extent which it has now reached is certainly not a good thing for the country, and it is a bad day for the party who supported it. It is not necessary to continue to criticise the arguments of the right hon. Member for Carnarvon Boroughs when he launched out into an accusation of borrowing, and explained all the evils that borrowing creates, that expenditure should he financed out of revenue and that borrowing was a crime against crimes. I remember the long book which he published—the book on the cure for unemployment—on how to conquer unemployment. Summarising his proposals at first he explained that it would require £145,000,000 and that he would raise easily £200,000,000 on the security of the Road Fund. He would borrow the money and proceed to spend it in two years and then leave the Road Fund to pay its interest and sinking fund to carry on after that.
It is clear that the right hon. Gentleman's opposition to borrowing is an opposition to other people borrowing. When he is in power he proposes, and indeed to do so with glee, that his expenditure will be financed by borrowing and he will not have the painful necessity
of imposing taxes on the people. The right hon. Gentleman the Member for Carnarvon Boroughs reached the dizzy heights of inaccuracy when he explained that he considered that the local government and the de-rating Bills bad been brought forward as vote catching schemes. Most of us on this side remember well how hard we strove to carry through that great piece of constructive reform, but I do not think that any of us had ever considered getting an advantage in the country from it. We had to deal with the reform of local government which involved the unification of the Poor Law and involved grave inroads upon the local government structure of the country, and nobody looking for a vote catching scheme would go about the country believing that it would be to their political advantage in a General Election.
We had to find great sums to carry through a new form of local government which everybody admitted was long overdue in the history of this country, and for rating reliefs that were not only necessary for the relief of industry in this country but absolutely essential, if the scheme of local government was to be carried through. In fact, we found a great many of the recommendations with regard to rating reform. in another of the books of the right hon. Gentleman the Member for Carnarvon Boroughs and his friends, and there we found several very interesting comments on taxation and direct taxation with which I shall not tax the Committee just now, save to say that the right hon. Member's opinions as to the prejudicial effects of heavy direct taxation are very clearly stated here in the Yellow Book. If he has changed his opinion there it is no more than he has done on a great many other subjects before the country.
There is, after all, a greater subject before the Committee to-night whatever the opinions of the right hon. Gentleman may be. The subject of a Budget on which the Chancellor of the Exchequer is about to make his speech is, after all, the vital and culminating point of the legislation of the year. I agree wholeheartedly with the views of the hon. Member for Burslem (Mr. MacLaren). It is the only thing on which I have ever agreed with him and perhaps ever shall agree with him. It is where he said
that so far from not being the proper occasion on which to discuss social reform, if you do not discuss social reform on the Finance Bill of the year, you have little chance of discussing it again because within the limits of the Finance Resolution the social reform will have to be carried on during the next 12 months.
At the end of a long Debate like this there are two sets of considerations which appear before us. There are the technical considerations. We know how such projects are arrived at. The men who have made a lifetime study of such matters, the heads of Departments, with great experience behind them, bring forward proposals which are communicated to the Minister and the Minister explains them to the House, where they are discussed by experts to and fro, but after the experts have finished, the plain man. the Member of Parliament, the layman and not the expert, has to make up his mind and decide upon them. Out of the proposals which the right hon. Gentleman brings forward, although in many ways they concern intimate and technical details, there arise two or three salient facts, both as to practice and policy. The right hon. Gentleman has brought forward a Budget and certain plans for dealing with the deficit on which I am certain he will not ask for the same line of consideration as was brought forward by the right hon. Member for Carnarvon Boroughs.
The first thing of note is that the deficit which has been created is the Chancellor of the Exchequer's deficit, the Government's deficit, and not the deficit of the Opposition or of the late Chancellor of the Exchequer. [HON. MEMBERS: "Oh!"] Well, the Chancellor of the Exchequer will follow me and no doubt he will make his case on that point, but I say without any hesitation that the £14,500,000 deficit is £14,500,000 for unemployment insurance and widows' pension expenditure due to legislation put through during the currency of the present Parliament and the present administration. The Chancellor of the Exchequer may say that it was necessary to add to the unemployment insurance expenditure, and to deal with the insolvency of the Insurance Fund. All that one can say is that the insolvency of the Insurance Fund has been caused by the
enormously high level at which unemployment is running.
When the Government eventually decided to borrow, in order to keep the Fund solvent, if they had been able to keep unemployment at a reasonable level and had been able to fulfil one tithe of the great hopes which they raised in the country, it would not have been necessary to raise the State contribution to its present height, and the right hon. Gentleman would not have needed to carry through the heavy expenditure which has led directly to the deficit on the present Budget. As to the prospective deficit, there is not one penny of that which is due to the Rating Relief Scheme. The whole of that scheme was financed by a tax which was imposed 18 months before expenditure began under that scheme. For 18 months the right hon. Member for Epping had a tax in being which accumulated funds for the financing of the scheme. It was not necessary to find one penny of taxation in the current year for that scheme, and the £16,000,000 which was saved and which has been applied to the finance of the Rating Relief Scheme still leaves £4,000,000 to meet the expenditure in future years.
Although it is true that on that expenditure in its turn there will be a deficit in a future year to be met, surely the Chancellor of the Exchequer will admit that the main expenditure under the Rating Relief scheme is a remission of taxation, not an expenditure on fresh objects, a remission of taxation, afterwards to be reimposed and by no means to meet a deficit in the ordinary sense of the word. It simply means a remission of taxation which has been made, and it is no more a crime for a Chancellor of the Exchequer to make a remission of taxation which subsequently has to be re-imposed than to take 6d. off the Income Tax and have to reimpose it in a future year. The technical details of the Budget are, however, of relatively small importance.
There is one item, on which not a word has been said, which strikes some of us with interest and amusement when we remember the Chancellor of the Exchequer returning, with flowers and bouquets, in triumph from the Hague, where it was said that he had gained a great victory for the British taxpayer as
against his foreign foes. I find that great victory explained in the OFFICIAL REPORT of yesterday, where he says:
Receipts from Reparations will, owing to the transition from the Dawes to the Young plan, involving a reduction in the total German annuities, be £15,500,000 as against £19,300,000 estimated last year."—[OFFICIAL REPORT, 14th April, 1930; col. 2669, Vol. 237.]
So much for the victory, so much for the bouquets and so much for the Freedom of the City!
The general lines of the Budget are the most important things at the present time. Those general lines involve a reversal of the policy of lower taxation, an absolute return to the policy of unregulated imports into a country which is already by far the largest importer of competitive manufactured goods and which is importing £200,000,000 or £300,000,000 worth of manufactured goods each year, which enter into direct competition with our home manufactures. They involve also a large and undefined tax upon building land. Is there anything in these proposals that is going to bring down the very high unemployment figures, which are the main kernel of the problem before the country to-day? There is nothing in these proposals to bring down unemployment but there is much in them to increase it.
What is the charge that we bring against the Chancellor of the Exchequer? The charge is that on the main question of the day, the question of unemployment, he brings forward a Budget which bears within it no means for the diminution of our present evil. It is a Budget of marking time, a Budget whose only excuse was that it would lead towards some great scheme of conversion, but no scheme of conversion appears in it. It is a Budget for which the Financial Secretary to the Treasury claimed credit on the ground that British funds had gone up. He claimed as one of the main features of the present situation that Consols and Funding Loan had improved, and that £100,000,000 had been taken from the floating debt and put into long-term securities.
There is another set of figures which it would be interesting to bring to the notice of the Financial Secretary, and
those are the figures in regard to unemployment, which he will find in this morning's newspapers. There are 1,154,700 people in this country who were wholly unemployed this morning, 425,000 temporarily stopped, and 96,000 casually employed, a total of 1,676,000 people unemployed this morning, or 498,000 more than a year ago under the Conservative Government. Those are the live register figures of people registering for unemployment benefit for the week. The Chancellor of the Exchequer actually had to preen himself on the fact that those figures show a diminution of 1,000 over the week before, although they are 498,000 more than when our Government were in power a year ago. These 498,000 people are a bitter commentary on the proposals and achievements of the Government.
Why is it so perilous for this country to waste time? It is true that our imports have shown an advance, pari passu with the extension of world trade, from 100 to 117, whereas world trade has gone up from 100 to 122. But our exports have fallen from 100 to something like 79. The fact that we have been able to maintain our high standard is undoubtedly due to our investments abroad and the invisible supports on which we have peen able to draw. But these are all wasting assets which will not go on for ever. The present moment is one of the utmost peril for this country. At the moment goods are coming into this country because of our investments overseas. During the nineteenth century three or four hundred thousand steel workers of this country were working at the time when few were working in other countries. We became the workshop of the world; and to-day all our customers are paying something on account. But that is falling away, and we are mobilising our capital in order to keep 1,600,000 people standing or walking upon our streets, and the 498,000 more out of work now than there were a year ago. That is a situation of great peril, and we are entitled to ask the Government what plans, what long-distance plans, they have to bring before the House of Commons and the nation.

The DEPUTY - CHAIRMAN (Mr. Dunnico): The hon. and gallant Member is asking questions the answer to which could not possibly be allowed in this Debate.

Major ELLIOT: I certainly agree that I cannot pursue that matter too far, but it only shows that the interest in this Budget is not so much in what it contains as in what is left out; and that is a complaint which has been brought from every quarter of the House. The test of this Budget will not come now; it will come in the autumn, when the Duties. the Safeguarding Duties, will come to an end. The President of the Board of Trade has described them as an interesting experiment. I remember very well his long article on the subject in the "Sunday Times" in which he said that as an experiment they should be continued.

The PRESIDENT of the BOARD of TRADE (Mr. William Graham): indicated dissent.

Major ELLIOT: I remember also that we are paying £834,000 in a full year for the admission tickets of foreigners into our markets. What is that going to do to decrease unemployment in this country? It will do nothing more than teach what the Chancellor of the Exchequer considers to be a needful lesson to those whom he thinks have been battening upon tariffs and Safeguarding Duties.
The test of this Budget will come in the autumn when the unemployment figures are known. We may expect a sharp fall in the immediate future as the Departments begin to prune these swollen registers and do their utmost to show a reduction, by hook or by crook, in the unemployment figures. But when the autumn comes hon. Members opposite will begin to receive letters from their indignant constituents who have been disqualified for one reason or another from the receipt of unemployment benefit, and after this sharp diminution we shall see them go up not merely to a million and a half, where they are just now, but up to 1,800,000, people out of work in this country. That is the test of this Budget. That is the test of the actions of the Government, and, when that test comes, we shall ask in this House what the Government have done to fulfil the hopes with which they came into office. By that time, the country will begin to ask also.

Mr. P. SNOWDEN: The hon. and gallant Gentleman who has just sat down is usually a genial, entertain-
ing, and fair controversialist, but the characteristics which usually mark his speeches have been singularly absent on this occasion. That may, perhaps, be due to the fact that he had a poor case to state. But there is, at any rate, one distinction that the hon. and gallant Member has achieved in his short speech. He can claim the credit of having made the most dishonest statement which has been made in these three days of Debate. He made reference to the reduction in the receipts from German annuities during the current year. But he did not tell the Committee that it was the right hon. Gentleman the former Chancellor of the Exchequer, now sitting beside him, who sent the British representatives to Paris to frame the scheme for the reduction of the German annuities, because it had been discovered that the annuities fixed under the Dawes scheme were likely or certain to be beyond Germany's capacity to pay. It was with the approval of every one of the creditor Governments that the total of the German annuities was reduced. It was with that intention that the ex-Chancellor of the Exchequer sent Sir Josiah Stamp and his British colleagues to Paris.
The right hon. Gentleman himself, in a recent Press article, made the same insinuation, but not so definitely as that which has disgraced the speech of the hon. and gallant Member who has just spoken. What I won for Britain at The Hague was a larger percentage of the annuities than had been fixed by the experts' report. May I say that this is not the occasion for any reply by the right hon. Gentleman's article, but I hope that some time he will tell the House of Commons the instructions with which he sent Sir Josiah Stamp to Paris. What I secured at The Hague was an increase in the British percentages from those which had been fixed in the report of the experts. May I also say, in answer to the sneer of the hon. and gallant Member for Kelvingrove (Major Elliot), that he is repeating again "his master's voice" with reference to the Freedom of the City of London—an honour conferred upon me which is a perpetual cause of envy to the right hon. Gentleman the Member for Epping (Mr. Churchill). He would not refer to it in this House so often if it were not a grudge which he is constantly nursing.
To get back to the main business of our Debate, I must, first of all, express my grateful thanks for the enthusiastic reception which has been given to my Budget by all sections of the House of Commons. I knew, or rather I thought, that it was a fairly good Budget, but virtues have been revealed in it, especially by those who have attempted to criticise it, to which I had not until now penetrated. What has purported to be criticism of the Budget has, I think, only shown what a sound and honest Budget it is. The right hon. Gentleman the Member for Epping, in his speech yesterday, devoted himself almost wholly to an excuse for what the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) described as his gambling debts. I never made one word of criticism of the right hon. Gentleman in the course of my Budget speech. I reserved that. I knew there would be other opportunities, but the right hon. Gentleman, as I have said, excused himself, illustrating the truth of the old proverb that "a guilty conscience needs no accuser." What are the charges which the right hon. Gentleman made against me yesterday? He referred to his own consistent efforts to reduce taxation and to reduce expenditure, but he made no reference to the pledge which he gave in his first Budget speech, that, he would reduce taxation or expenditure by £15,000,000 each year.

Mr. CHURCHILL: I gave no such pledge, and the right hon. Gentleman knows perfectly well that he is now repeating for the tenth time a gross misrepresentation.

Mr. SNOWDEN: The right hon Gentleman is attempting, as he has done on previous occasions, to make a distraction between a pledge and a promise, but, whether it be a pledge or whether it be a promise, at any rate it was a promise or a pledge that was never fulfilled. He referred to his own endeavours to reduce taxation. What is his record in that matter? One hon. Member who spoke in the Debate, this afternoon, referred to the fact that the right hon. Gentleman imposed more taxes during his five years of office than had been imposed by any Chancellor of the Exchequer in the last 80 years. The right hon. Gentleman had four Budgets for which he was respon-
sible, for of course he was not responsible for the first, and that was the only Budget which gave the right hon. Gentleman a genuine surplus. In every year except last year the right hon. Gentleman imposed new taxation. He originally intended to impose more, but anyhow the yield of the indirect taxes which he imposed amounted to £34,500,000 a year. It is quite true that the right hon. Gentleman reduced some taxes. He used the surplus which I left to him.

Mr. CHURCHILL: Which you inherited.

Mr. SNOWDEN: Which I inherited?

Mr. CHURCHILL: Yes, certainly. The right hon. Gentleman inherited from his Conservative predecessor a surplus of £40,000,000, and he bequeathed a surplus of £30,000,000.

Mr. SNOWDEN: I welcome Daniel coming to judgment. What did I do with the surplus which the right hon. Gentleman said I inherited from my predecessor in 1924? I gave, as he knows, remissions of taxation to about that amount, and after the right hon. Gentleman was able to meet, in his first Budget, the cost of those remissions, he was left, as he admitted just now, with another disposable surplus of £30,000,000. and he devoted that surplus to the reduction of the Income Tax, and to alterations in the Super-tax.

Mr. CHURCHILL: And the Debt.

Mr. SNOWDEN: I have a case that needs neither exaggeration nor misrepresentation. So much for the right hon. Gentleman's endeavours to reduce taxation. How did he prevent his three or four deficits from being larger than they were? We all know. He robbed every hen-roost he could find, and his raids and forestalments in those years amounted to no less than £54,000,000, and that was used to meet expenditure of a recurring character, postponing the day when it would be necessary to foot those bills. His policy always was one of putting off the evil day as long as possible, probably in the hope that somebody else would be responsible for undoing his mischief. Here is a calculation that has never been made before. If the right hon. Gentleman had not used capital assets to meet his expenditure, he would have been
obliged in the last four years to increase taxation by £20,000,000 a year. He has left that for somebody else to do. And I do not include the cost of unemployment insurance in this calculation. The right hon. Gentleman says that there would have been no need if the Tory Government had remained in office, and he had remained in charge of the national finances, for any new taxation this year. The need there would have been, but I grant that there might not have actually been increased taxation. There are other ways of dealing with such a situation with which the right hon. Gentleman is quite familiar. I think that he did a little of it last year. One way of avoiding an increase of taxation is to write up revenue and to reduce Estimates of expenditure, and that, in no small degree, is the explanation of the deficit of £14,500,000 this year, and nearly the whole explanation of the fall in revenue of £12,000,000.
The right hon. Gentleman made a very serious charge against me when referring to this matter yesterday. He did not merely insinuate it; he almost definitely stated that I had kept back revenue in order to augment his deficit. There is not one word of truth in that, and the right hon. Gentleman knows it. Has the right hon. Gentleman forgotten Question Time in the weeks just before the end of the financial year, and does he not know that his friends charged the Revenue authorities with the methods of the Spanish Inquisition and complained of the tortures to which they were subjecting defaulting taxpayers? For weeks before the end of the financial year, the Tory newspapers were talking about the screw that was being put upon the taxpayers. The methods which were followed by the Inland Revenue authorities were precisely the methods with regard to the collection of revenue which the right hon. Gentleman and every previous Chancellor of the Exchequer followed.
He tried to explain the fall in Stamp Duties by the financial crisis in the City. Last year in the Budget Debate I pointed out that his estimates were too high. It was obvious to everybody that the great Stock Exchange boom of 1928 had spent itself. The right hon. Gentleman ought to have been aware of the fact before he attributed the fall in the Stamp Duties to the events which began last September
—the Hatry crash and the Wall Street crash. What are the facts? In the march quarter—that was just a month before the introduction of the right hon. Gentleman's Budget—the receipts from Stock Exchange stamps amounted to £4,223,000. The revenue began to drop at once. The boom had spent itself. The next quarter showed £1,000,000 less. The financial crisis did not come until September, and in the December quarter the revenue dropped by less than it dropped in the quarter before the financial crisis. Perhaps my Scottish friends will excuse me if I quote a Scottish saying:
Facts are chiels that winna ding.
The right hon. Gentleman made a reference to postponements or forestalments, and, although he did not say it, at any rate he insinuated, that I was in some way responsible for that. That cuts both ways. The postponements of sugar told against the right hon. Gentleman, but the tobacco forestalments told against me. The right hon. Gentleman knows full well that, in advance of the Budget, these things always happen, and the Customs and Excise authorities always take them into consideration in framing the Estimates of the year.
I want to turn to a matter which has figured rather prominently in the course of these Debates, and that is the responsibility of the present Government for the deficit and supplementaries. The hon. and gallant Member who has just sat down said with, if he will permit me to say so, no knowledge of the subject at all, that the deficit was accounted for by the increase in the unemployment insurance grants and widows' pensions.

Mr. CHURCHILL: The deficit of the current year.

Mr. SNOWDEN: No, the deficit of £14,500,000. The hon. and gallant Gentleman was at one time at the Health Department of the Scottish Office, and really he ought to know better. He said that it was accounted for by £5,000,000 for the cost of widows' pensions and £7,500,000 unemployment grants. In fact, no part of the cost of the new widows' pensions fell into the last financial year. Now about these supplementaries: A very considerable portion of the money involved in supplementaries was for matters for which the late Government were wholly responsible. The right hon.
Gentleman does not deny that at all. For instance, the right hon. Gentleman under-estimated the beet-sugar subsidy. There was a Supplementary Estimate of £560,000 for the Army on account of China. The right hon. Gentleman knew when he made his first Estimate for the year that that cost was due, but it was left to a Supplementary Estimate.

Sir L. WORTHINGTON-EVANS: It was due to the evacuation of the Rhine.

Mr. SNOWDEN: Then we come to Air. The Air Minister said in his Memorandum of the Estimates that a Supplementary Estimate might possibly be needed. It was, to the extent of £750,000. Then there were other Supplementary Estimates amounting to a very considerable sum. I will not detain the House by giving details, but at any rate, the total of Supplementary Estimates for which the late Government were responsible was about £4,250,000. But—this is the important point—the revenue fell short by £12,000,000. Now if revenue had come up to expectations then, with the very considerable savings that we were able to effect upon the original estimates, the cost of the unemployment grants and all the other supplementaries for which we were responsible would have been met and they would have contributed on balance nothing at all to the deficit. The right hon. Gentleman the Member for Epping says, "Ah, yes, but what about the largely increased expenditure?" Well, Sir, if I had increased the expenditure I should not apologise if the purpose for which it was required were wise. I need not refer to the right hon. Gentleman's record on that matter, but I leave the question where it was left by the devastating criticism which was made by the right hon. Gentleman the Member for Carnarvon Boroughs, the alliance with whom is one which he himself was most anxious to make.
The increased expenditure is to a considerable extent accounted for by automatic increases. There is £5,000,000 for widows' pensions and I am glad of it. There is nothing of course—I take that from the Suspensory Fund—for de-rating, about which I shall have something to say later on. There is the amount for unemployment. I do not apologise for that
item which amounts to £14,000,000 this year. May I put it to my hon. Friends behind me that that is not a permanent expenditure; it is an expenditure which we hope will disappear with improving employment, and I do not know that it is necessary for me to remind them that that £14,000,000 will be available for other purposes. I have been criticised in regard to n y provision for unemployment. I gave my defence upon that point some time ago when I stated why I did not adopt borrowing in the early part of our administration. I had ample justification for doing it a few weeks ago when the Floating Debt had been reduced by such an enormous sum. May I remind the Committee that the reduction of the Floating Debt, is not now £100,000,000, and if hon. Members will look at the Exchequer returns in this morning's paper they will find that the actual sum is £127,000,000.
Some criticism has been passed upon my proposals to meet the deficit of £14,500,000 in three instalments. The right hon. Gentleman said that I was opposed to the Fixed Debt charge. I have always been in favour of it, but my criticism of the right hon. Gentleman's proposal was that he was fixing the figure too low and the experience of the first two years justifies the criticism I made. Of course, I admit that you cannot judge by one year or two years. You may not be able to judge before three, four or even five years. In a scheme of this sort you have to take the lean years and the fat years together. But my criticism at the time was that I though the figure he had fixed would not be sufficient to meet the obligatory commitments for debt reduction. This is getting a stale subject now, but I must make this one word of criticism because of what the right hon. Gentleman said about my policy. That is his own record, and I dismiss it by giving two figures. If during his period he had provided £50,000,000, which was the statutory sum, he would have provided £250,000,000, whereas he actually provided only £197,000,000. A good deal has been said about the effect on national credit.

Mr. CHURCHILL: What about savings Certificates?

Mr. SNOWDEN: A good deal has been said—and reference has been made to it by the late Secretary for War—about
national credit. The right hon. Gentleman attempted to criticise the observations made by my hon. Friend the Financial Secretary last night. I have made two conversions this year, one in the autumn and one in February. My first conversion was criticised in some quarters on the ground that the terms were too good. I did it quite deliberately. It was something in the nature of an experiment, and one reason why I took a certain amount of risk was because I had in mind the experience of the right hon. Gentleman 12 months before. I thought it just possible that there might be some people who were not aware that there had been a change in the financial control of the country. The right hon. Gentleman's conversions failed to realise what was necessary to meet maturing debt by nearly £60,000,000. I could not afford to take a risk like that. But I had other purposes in my mind. I did not disclose them then, and I am not going to state them now beyond this. The purpose I had in mind can be seen in the state of the Money Market to-day, the reduction in the Floating Debt, and the reduction of the Bank Rate from 6½ per cent. to 3½ per cent.

Sir L. WORTHINGTON-EVANS: Did you do that?

Mr. SNOWDEN: I have never claimed, and I should be sorry if the impression were to prevail, that the Treasury attempts to control the bank rate. I did not say that, but I do say, and I think every financial authority in the country will agree, that the cheap money is to an appreciable extent due to the reduction in the volume of Treasury bills. I do not know whether the Estimate is true or not, but I see that the financial newspapers always assume that a 1 per cent. reduction in the bank rate gives relief to industry to the extent of £10,000,000. This cheap money is giving to us—to the House of Commons—as 1 pointed out on Monday, a reduction in the cost of the Floating Debt of something just over £11,000,000 this year.
The right hon. Gentleman said that my proposal to deal with Budget deficits is illusory. Let us see. I am doing it in order to make a future Chancellor of the Exchequer of the type of the right hon. Gentleman responsible to the House of Commons. By the War Loan Act of 1919 a Chancellor of the Exchequer
obtained complete freedom not to make any provision for making good a deficit. I am going to put into the Finance Bill a Clause which says that the Chancellor must make such provision in the following year unless he submits proposals to Parliament, and Parliament approves of those proposals. I am turning it the other way about, in the interests of honest and sound finance, a subject upon which the right hon. Gentleman, when in a position of greater responsibility, used to dilate so very definitely. Some of the things that the right hon. Gentleman said were extremely interesting. Somebody yesterday, in the course of the Debate, quoted from Philip drunk to Philip sober. May I quote from the right hon. Gentleman as Chancellor of the Exchequer and the right hon. Gentleman as an ex-Chancellor of the Exchequer? By the way, I believe it was the late Secretary of State for War who asked, what good is this £5,000,000, which is provided for Debt reduction, going to be? The right hon. Gentleman, in his Budget speech of 1926, said this:
Every repayment of Debt liberates an equal sum for the support of industry and commerce."—[OFFICIAL. REPORT, 26th April, 1926; col. 1718, Vol. 194.]
But this is the gem. Speaking, also in 1926, at the Mansion House, in an atmosphere congenial to the expression of such sentiments, he said:
There were, however, some very broad, simple truths which gave a sort of rough and ready rule of thumb guide through all these mysteries and tangles.
He was referring to finance, currency, credit and banking.
The fundamental principles of finance, public and private, were these: Cultivate peace and good will, work hard, avoid profusion, save, buy Savings Certificates, balance your Budget and pay your way. Pay your debts, pay them quickly.
That is very good, sound policy, and I am going to carry out that policy.
I turn to the consideration of the new taxation which I have submitted to the House. May I, first of all, refer to two speeches which were made from the Liberal benches? An hon. Member referred to evasion of tax by 11.0 p.m. the formation of companies. I am very much obliged to him for his contribution but I think he will realise that it is a matter of detail
and that there will be ample opportunity later on of considering the points that he has put forward.
The right hon. Gentleman the Member for Carnarvon Boroughs expressed some regret that I had not been able to put more taxation on to the brewers. I think he did not appreciate the position. If an addition is made to the taxation of beer sufficiently large the brewers will pass it on to the consumers in higher prices. If the increase in taxation is not large enough for that the brewers can nullify it by reducing gravities. Thus if you attempt to tax the trade beyond a certain point the revenue will suffer because the Beer duty is charged according to specific gravity and though a reduction of one or two points in the specific gravity may not be detected by the beer drinker it may make millions of difference to the revenue. If the right hon. Gentleman could show me some practical way of getting more from the brewers I should be most happy to give it my attention.
In regard to the new taxes there are of course fundamental differences between the party opposite and our party. The right hon. Gentleman yesterday quoted from a pamphlet of mine. It is a long time since I read it and I misunderstood him. I thought the second of the quotations that he made was also attributed to me as my view. I find on reading the report that he was quoting my statement of the policy of our opponents. I have looked at the pamphlet this morning. One of my friends below the Gangway this evening quoted the remark of a writer who was reminded of something he had written and forgotten and said, "I must have written it because it is so very good." This is a very good pamphlet. I should like to send a copy of it to every Member of the House of Commons and I would have done so only I am taxing myself so heavily in this Budget that I am afraid that I shall have to economise. I stand by every word in the pamphlet. [An HON. MEMBER "What, is it called?"] It is called "Wealth and Commonwealth" and it is published by the Labour party, price one penny. After quoting the statement of the other side which the right hon. Gentleman gave yesterday I went on to say:
The Labour party takes quite the opposite view. While they admit that
taxation when used for wasteful purposes is in the highest degree harmful, they contend that wise national expenditure is the most economical form of spending; that large incomes and estates left for the personal use and disposal of the holders are, on the whole, not used in a way which gives the greatest amount of social utility; that national revenue can be used so as to secure a juster distribution of national wealth; that taxation can divert the national income into more useful channels; that the expenditure of national taxation can be used to stimulate trade and industry; and they agree with the old economists that taxation instead of discouraging individual effort tends to stimulate it.
I wish that I had an hour to elaborate these things. It says there that the taxation can be used to stimulate industry. Does the party opposite agree with that? Why their De-rating Bill which has put £30,000,000 a year of taxation upon the taxpayers was introduced on the ground that it would stimulate industry. There is another point of which I was reminded whilst the hon. Gentleman was speaking. There seems to be a fallacy running through all the criticism of national taxation. They seem to think that the money that the State takes from taxation is thrown down the sink. Take some of our items of taxation—de-rating. They admit or, at any rate, they claim that that is money collected by the State given to industry so that industry benefits from it. Take the Widows' Pensions or Old Age Pensions. Is that money wasted? Not at all! It is increasing the spending power of the nation. I think that it is the only reason that I can give for the paradox that we see to-day. We know how bad trade has been, and yet from all appearances the general mass of the people seem to he as well off or better off than ever. What is the explanation? There are probably many explanations, but I think that the money that is spent by them derived from Old Age Pensions, Widows' Pensions, War pensions—£60,000,000 a year—the Unemployment Fund, that that is in a large measure responsible for the standard of living of the people not having apparently fallen in these times. I tell the party opposite that I believe—I do most profoundly believe—that our Unemployment Scheme has saved this country from a revolution.
Now about fundamental differences. The right hon. Gentleman yesterday advocated indirect taxation. He said he
did not agree with the Protectionist hypothesis. I do not know what the Protectionist hypothesis is. I am sorry that the right hon. Member for Epping (Mr. Churchill) was not in the House when the hon. Member for Lichfield (Mr. Lovat-Fraser) read a long quotation from a statement of the right hon. Member's views on tariffs. Does the right hon. Gentleman regard it as part of the Protectionist hypothesis that the foreigner pays the duty? If the foreigner did pay, what a happy thing it would be! Why, we could relieve ourselves entirely of taxation by making the foolish foreigner pay. The right hon. Gentleman knows that Protection raises prices. Of course, there may be other influences at work, but if those other influences were not operating, it would raise prices.

Brigadier-General Sir HENRY CROFT: What prices?

Mr. SNOWDEN: I am not in favour of indirect taxation generally though I am not opposed to indirect taxation upon liquor. I have always thought that liquor enjoys what is, in effect, a State-conferred monopoly, and the taxation of liquor has become so ingrained in our taxation system that we cannot remove it. I have always been against the multiplication of taxes. The fewer taxes we have, the better. Everybody knows that indirect taxation is most irritating, and it has, moreover, this grave objection, that you cannot levy it in such a way as to make all the citizens contribute fairly and equitably to it. I was speaking this evening to a Member of this House who told me that he does not smoke, he does not drink, he does not take tea and he does not take coffee. [HON. MEMBERS: "Name!"] He is already carrying out the suggestion of the hon. Member for West Salford (Mr. Haycock) that we ought to live on water. There is another reason why I do not believe in indirect taxation, and that is because the burden must inevitably fall with the heaviest weight upon the poorer part of the population.
Take the new taxes. The money had to be found. A number of speeches have been made which seemed to suggest that it is the business of the Chancellor of the Exchequer to provide for schemes not even approved by Parliament. The hon. Member for the Combined Universities
(Miss Rathbone) based her speech upon an ignorance of the functions of the Chancellor of the Exchequer. She suggested that this Budget ought to have set aside incalculable sums for purposes which had never even been discussed, let alone approved, by Parliament. The business of the Chancellor of the Exchequer, in making his Budget, is to provide, in the coming year, for the expenditure that Parliament has approved. I have been charged over and over again that I have imposed these burdens upon the taxpayers. I have not imposed these burdens upon the people. It is the House of Commons that has done it. It is the House of Commons that has approved this expenditure. In regard to widows' pensions, the party opposite must take a certain amount of responsibility, because I find that they did not divide against the Third Reading of the Bill. I wonder whether it was political motives that induced them not to vote against that Bill, after having done all that they could to prevent it being passed. I have to find the money and I am proposing certain ways and means. When I announced that I was going to put 6d. on the Income Tax, what glee there was in the ranks of Tuscany opposite, but I never saw such a rapid transition from the gay to the grave as when I announced the changes that I proposed to make in graduation. You would have thought that every hon. Member opposite had just received word that his dearest relatives had all passed away. The right hon. Member for Epping raised the question of company reserves. I wish that some method could be devised by which they could exempt from taxation but nobody has ever been able to devise a scheme which would be watertight, and which would not provide abundant openings for evasion, and until ingenuity has devised such a plan I am afraid that we shall have to continue the present practice. We have been told that these taxes will be drawn from the savings of the people. It all depends on the temperament of the individual. Some individuals will save; others, like the right hon. Gentleman, are naturally spendthrifts. I should be likely to save because I am naturally of a saving temperament. Others will spend, but if they spend it will provide employment. Whether it is socially beneficial employment or not is another matter.
In regard to Death Duties the right hon. Gentleman said that he was going to shed no tears of sympathy on millionaires. No, but he showed considerable compassion for them when he raised the Death Duties five years ago, because it was the millionaires that he left alone. Some hon. Members have made a reference to the Capital Levy. I was a strong advocate of that proposal and I shall never cease to regret that when the time was so favourable it was not adopted. When trade depression came the opportunity had passed, but there is a way in which we can partially apply it—and I am doing that. It is this. Wartime made fortunes, profiteering fortunes are now coming into the Estate Duty. An important Committee of this House has said that when millions of men were dying and exposed to death on the battlefield a few profiteers at home increased their wealth by £4,000,000,000. I am going to get some of that back. What about Safeguarding. That is not a revenue question. I am not repealing the Safeguarding Duties; it is the party opposite who are repealing them. They were imposed for a definite and fixed period, and they expire. Surely the party opposite do not expect that the party which was returned at the last Election in opposition to Safeguarding is going to do what they themselves have not done.
There is only one other matter to which I must make some reference, and that is the taxation of land values. Some of my friends have expressed regret that it has not been possible to introduce this proposal into the Budget. I should have liked to have done it. The right hon. Gentleman the Member for Carnarvon Boroughs raised the same question, though quite mildly. But he does not understand the difference between to-day and 1909. The right hon. Gentleman appears to have forgotten that the Budget in which he brought forward those proposals took 18[...], days in Committee in this House, that it took 12 months to a day to get the Finance Bill through, and then only after a General Election. Something has happened since then Only the older Members of the House will remember Tommy Bowles, who got passed through this House the Provisional Collection of Taxes Act. Under that Act there is a time-table for the stages of the Finance Bill, and if we do not get the Bill by a certain date
the Resolutions lapse and the financial system of the country is thrown into chaos. The Finance Bill must, become law by 4th August. If it does not, we cannot collect taxes, and everyone who has paid taxes under the Finance Bill can claim to have them repaid.
I am as anxious as most land-taxers that this question should be dealt with as expeditiously as possible. Some of my land-tax friends are very difficult people to please. They are like all people with one idea; they think there is nothing else in the world that is of the least importance. But there are other questions. We have a terribly overcrowded Parliamentary programme, and it is very largely due to the very worthy desire of our friends to see everything done in the present Session of Parliament—as though we were going soon to be out of office. We have slum clearance, the raising of the school Age, and one or two other matters, and the programme is terribly crowded. I have thought weeks and months about this, but I realised that it could not be done with any possibility that we could get our full proposals including the tax carried into law this year. The right hon. Member for Carnarvon Boroughs said that land valuation had already been done, but the valuation that he made is really of no use at all. His proposals were something quite different from what I should have made and they are practically of no use in this case. Therefore a new valuation will be needed, but I will say this: that if there are difficulties in the way, if there is hostility in the way, to prevent us getting the Valuation Bill through this Session, then I shall make every possible effort, even if it means in the next Budget the sacrifice of all those matters of detail and administration and the like which form so large a part in every Finance Bill, to carry this valuation by the insertion of an impost upon land values in the next Budget. But I hope that will not be necessary. We shall introduce the Valuation Bill forthwith and we shall make every effort to have it passed into law this Session.
I have detained the Committee far too long and I apologise. The party opposite have, in the course of this Debate, tried to get some of my friends to weaken in their enthusiasm for this Midget by saying that so far as all their aims are concerned, it is the end of all things.
That is sheer nonsense. I repeat what I said in the concluding part of my Budget speech. I do not care what party is in power the development of the social services could not be arrested. It will have to continue and the automatic increase in cost will continue, but what I said the other day was "First things first." There are many things we would like to do, but, in my opinion, the most urgent of all problems is to do what a Government may be able to do, to lessen unemployment and to bring industry back to prosperity. I have always taken this line. Some people call themselves Socialists and talk about the overthrow of the capitalist system. Arrant nonsense! What we have to do is not to overthrow the capitalist system, but to transform the capitalist system, and the industries that I want to place under public ownership and control are not the industries that are going, but the industries which are going concerns, and I want to make them as prosperous as possible.
I am very much obliged to the Committee, and very sorry to have detained them so long, but I began in a rather bantering way by referring to the enthusiastic reception of my Budget. May I say quite seriously that I have never heard in more than 20 Budget Debates in this House such a weak, and, if I may be permitted the expression without offence, at times such a contemptible opposition as that which has been put up to this Budget. I am assured from what has taken place that we are going to get this Bill when it appears as a Finance Bill through the House of Commons. The hon. and gallant Member who preceded me talked about what was going to happen next November. As a Scotsman, he has probably the gift of being a seer, but we will let events show whether he has prophesied rightly or not. When I stand at this Box next year I shall not, I feel confident, be ashamed to stand before the House of Commons to be judged by the proposals which I have submitted this year.

Question.
That it is expedient to amend the Law relating to the National Debt, Customs and Inland Revenue (including Excise), and to make further provision in connection with Finance,
put, and agreed to.

Resolution to be reported To-morrow.

Committee to sit again To-morrow.

TRANSFER OF SUMS FOR RATING RELIEF SUSPENSE ACCOUNT TO EXCHEQUER.

Considered in Committee under Standing Order No. 71A.

[Mr. DUNNICO in the Chair.]

Resolved,
That there shall be transferred to the Exchequer from the Rating Relief Suspense Account in the current financial year the sum of sixteen million pounds, and in the financial year ending on the thirty-first day of March, nineteen hundred and thirty-two, the balance remaining in the said account."—(King's Recommendation Signified).—[Mr. P. Snowden.]

Resolution to be reported To-morrow.

TEMPORARY ADDITIONS TO NEW SINKING FUND.

Considered in Committee under Standing Order No. 71A.

[Mr. DUNNICO in the Chair.]

Resolved,
That the following sums shall be charged on and issued out of the Consolidated Fund and applied in the same manner as the New Sinking Fund (1928), that is to say:
In the financial year ending on the thirty-first day of March, nineteen hundred and thirty-one, the sum of five million pounds;
In the financial year ending on the thirty-first day of March, nineteen hundred and thirty-two, the sum of five million pounds;
In the financial year ending on the thirty-first day of March, nineteen hundred and thirty-three, the sum of four million five hundred thousand pounds."—(King' s Recommendation, Signified).—[Mr. P. Snowden.]

Resolution to be reported To-morrow.

PROVISION IN THE CASE OF DEFICIT IN ANY YEAR FOR REDEMPTION IN THE NEXT YEAR OF A CORRESPONDING AMOUNT OF DEBT.

Considered in Committee under Standing Order No. 71A.

[Mr. DUNNICO in the Chair.]

Resolved,
That, if it appears by the account of the public income and expenditure of the United Kingdom prepared under section four of the Sinking Fund Act, 1875, for the
financial year ending the thirty-first day of March, nineteen hundred and thirty-one, or for any subsequent financial year, that expenditure was in excess of income, a sum equal to the excess shall in the next financial year be charged on and issued out of the Consolidated Fund and applied in the same manner as the New Sinking Fund (1928)."—(King's Recommendation Signified).—[Mr. P. Snowden.]

Resolution to be reported To-morrow.

Orders of the Day — ARMY AND AIR FORCE (ANNUAL) BILL.

Order read for Consideration of Lords Amendments.

Motion made, and Question proposed, "That the Lords Amendments be now considered."—[Mr. T. Shaw.]

Mr. CHURCHILL: I am sure that we shall expect a statement from the Secretary of State for War or some Member of the Government as to the course that the Government propose to take.

The SECRETARY of STATE for WAR (Mr. T. Shaw): I respond willingly. I have carefully read the Debate in another place, and note particularly one remark made by the Noble Lord who moved the Amendment which was made to the Bill. He said that in a comparatively small House, 354 out of a total of 615, the decision taken was taken by a majority of only 84. I am entitled to call attention to the fact that the House which amended the Commons' decision consisted of 57 members out of a total of 733. I thought I would call attention to the arithmetic, in order that we might form some idea of whether the criticism about numbers was well grounded or not. I have read the discussions with scrupulous care, and I do not see any new arguments from those used in this House. I respect very highly many of those who took part in the Debate, but I cannot say that I noticed any new point, nor did I notice any point more strongly stated or better stated than it was stated in this House.
The Government's position is that they disagree with the Lords in their Amendments and that the Government Whips will be put on against them. Equally, the Government Whips will be put on against the Amendment of the hon. and gallant Member for Oxford (Captain Bourne). The point having been sub-
mitted to a free Vote of the House, and the House having decided the point, the Government accept that decision, and the Government Whips will be put on in its favour.

Mr. CHURCHILL: The Secretary of State for War said that be would not trouble the House with any Arguments, that he would not repeat any of the arguments used in the previous Debate. The arguments against the course which he is asking the House to adopt were arguments which on a previous occasion appealed to him so strongly that he testified to his opinion in the Lobby in opposition to the views of a great many of those with whom he is accustomed to act. The proposals having gore to another place, a similar latitude was exercised, and the question which will be before us in a few minutes is not whether we should support the Government in carrying the proposals which they have put forward as a responsible executive body, but whether the same latitude of opinion, apart from the guidance of the executive, shall not be allowed to the Second Chamber as has been utilised here. My hon. and gallant Friend the Member for Oxford (Captain Bourne) has an Amendment which reduces the difference between the two Houses to a very small point and offers to the Government the opportunity of obtaining this vitally important and, indeed, indispensable legislation in exactly the form in which they, as a responsible Administration, framed it and brought it forward. I suggest that the right hon. Gentleman should weigh the matter very carefully, because, undoubtedly, it is strictly within the competence of the Second Chamber to carry a modification of this kind, and if they should-of course, I do not forecast what their action may be—adhere to their view, and if they should take the same view as is embodied in the Amendment of my hon. and gallant Friend, they would, after all, only be standing on the same foundation of judgment and authority as was adopted by the Secretary of State for War, by the Secretary of State for India, by, indeed, the responsible Government as a whole when they originally introduced the Motion. The ground on which the Second Chamber would be standing would be a very strong one, and obviously their power to adhere to that ground, if they choose, would be inexpungable. The respon-
sibility rests with the Government of the day for procuring assent for this vital and indispensable legislation, and part of their responsibility will be discharged by paying proper attention to the lawfully expressed views of other parties in the Constitution.
Question put, and agreed to.
Lords Amendments considered accordingly.

CLAUSE 5.—(Abolition of death penalty in certain cases.)

Lords Amendment: In page 4, leave out Clause 5.

Motion made, and Question, "That this House doth disagree with the Lords in the said Amendment," put, and agreed to.—[Mr. T. Shaw.]

Captain BOURNE: I beg to move, as an Amendment to the words restored to the Bill, in page 4, line 33, to leave out paragraph (3).
This is the paragraph which the Lords have reinstated in the Bill. As the Secretary of State for War has said, the effect of my Amendment, if accepted, would be merely to bring the Bill back to the form in which it was originally introduced in this House by the Government. I think we are entitled to assume that, when the Government introduces a Bill of this nature and importance, the form in which it is originally introduced in this House is the one which has the approval of the Army Council, and the one for which the Government as a whole is responsible. I feel reinforced in that argument by the fact that the Secretary of State for War expressed very strongly to the House the view that the Amendment made in the Bill was one that he could not support, and he went so far as to back up that opinion by voting against the Amendment in the Division Lobby. In a matter of this kind, we ought to pay great attention to the opinion of the Secretary of State for War.
I listened with very great attention to the Debate on this subject, and it seemed to me that the arguments put forward by the hon. Member for Shoreditch (Mr. Thurtle) and other hon. Members were founded upon a totally false assumption. The hon. Member for Shore-ditch, who served with distinction in the War, based the whole of his argument on the improbability of war on a large scale in the future. I do not anticipate
that in the lifetime of any hon. Member of this House we shall see another war on the scale and under the same conditions as the war between 1914 and 1918. If hon. Members turn up the history of this country, they will find that between the Great War and the Napoleonic War we were involved only in two campaigns of any magnitude. One was the Crimean War and the other was the Boer War. We have fought innumerable campaigns in different parts of the world, none of them on a very large scale. We had two campaigns in Afghanistan, one in Scind and others in China, Abyssinia, West Africa, two in South Africa and two in Egypt. Is there any person in this House who would prophesy that we are not likely to have a frontier war in defence of our own position to ensure peace in our own territories? When you are dealing with a war of that sort, the experience gained in the Great War is a totally fallacious basis to go on. There, the men were up against high explosives and an uncomfortable life in the trenches. It was not my own fate to serve under those conditions. [Interruption.] I served in another theatre of war. But I do realise that heavy shell-fire is a thing which is liable to make a man fear. When, however, you are engaged in the kind of war in which we engaged in the last century, what really irks people is not the danger to life, but the incessant fatigue and marches, and the great privations inseparable from a frontier campaign. If hon. Members will study the accounts of the American Civil War, they will find that the greatest difficulty arose from desertions. It was that which affected the strengths of the North and South armies when they went into battle. It was not because the men were afraid to fight, but because they became tired to death of the eternal routine of marches and counter-marches.
In a war of that sort, if it should be our fate ever to undertake it again, the greatest danger of desertion would arise from the fact that the men might become fed up, It is a complaint which is very easily infectious on active service, and it certainly was in the American Civil War. I think in this case we should take the advice of those who have been responsible for conducting military operations and have had a wider experience than any of us who took part in the Great
War can possibly have had. The conditions of that War are not likely to be repeated, and we are legislating on this occasion, not for a large Army, either voluntary or conscript, raised from among our fellow citizens, but for the professional Forces of the Crown.

Lieut.-Colonel ACLAND-TROYTE: I beg to second the Amendment.

Mr. THURTLE: I suggest that the House would be sadly lacking in a sense of its own dignity if it were to discuss the merits of this question again. This House is the duly elected representative House of the people, and, after considering this question on its merits recently, it came to a unanimous decision on a free vote in favour of the abolition of the death penalty for desertion. In these circumstances, it seems to me an arrogance and impertinence and a piece of astounding audacity on the part of another place, which has been described by the right hon. Gentleman the Member for Epping (Mr. Churchill) as a worn-out anachronism, to presume to attempt to override the decision of the elected representatives of the people, come to without any hesitation. The House should not demean itself by once again debating the merits of the question and should reject the Lords Amendment.

Mr. BOOTHBY: I would ask the Secretary of State to consider very seriously whether he ought not to accept this Amendment. It simply restores the position originally taken up by the Government. It simply restores the proposal which the right hon. Gentleman himself, and also the Secretary of State for India, voted for, and which no Member of the Government voted against. It does seem to me that in these circumstances the responsibility of the Executive is very considerable. The Executive thought fit to allow a free vote of the

House on this question. They are perfectly entitled to do that, but when they find themselves confronted by an equally free vote, I do not see why they should decline to accept the responsibility. This House, in the present circumstances, ought to be guided by the attitude of the Executive, and, in view of what has happened in another place, I do not think that the Executive can disclaim responsibility. If the Amendment is accepted, we go back to the position which was originally taken up by the Government, which the Secretary of State himself warmly commended to the House, and for which he himself voted. If he accepts this Amendment, the House of Commons will probably be able to present a united front to the House of Lords on this question, because the Amendment does not go nearly so far as the Amendment which has come down from the other House. No one in any quarter of this house denies that the House of Lords does occupy some position in the Constitution of this country, and, if the right hon. Gentleman persists in declining to accept any responsibility on behalf of the Government, a very grave and serious situation will arise, because, if a clash on this issue takes place, and the other House does not give way, the right hon. Gentleman may be compelled to accept responsibility for having no discipline at all in the Army. In these circumstances I think he ought to consider very seriously whether he would not be well advised to accept this Amendment, when there might be a reasonable accommodation between the Houses. If there is no accommodation, it seems to me that an almost impossible situation will arise.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 194 Noes. 50.

Division No. 259.]
AYES.
[11 58 p.m.


Adamson, Rt. Hon. W. (Fife, West)
Barnes, Alfred John
Brooke, W.


Adamson, W. M. (Staff., Cannock)
Beckett, John (Camberwell, Peckham)
Brothers, M.


Addison, Rt. Hon. Dr. Christopher
Bellamy, Albert
Brown, C. W. E. (Notts. Mansfield)


Aitchison, Rt. Hon. Craigle M.
Benn, Rt. Hon. Wedgwood
Brown, Ernest (Leith)


Alexander, Rt. Hon. A. V. (Hillsbro')
Bennett, William (Battersea, South)
Brown, W. J. (Wolverhampton, West)


Alpass, J. H.
Benson, G.
Burgess, F. G.


Ammon, Charles George
Bentham, Dr. Ethel
Burgin, Dr. E. L.


Angell, Norman
Bondfield, Rt. Hon. Margaret
Caine, Derwent Hall.


Arnott, John
Bowen, J. W.
Cameron, A. G.


Ayles, Walter
Broad, Francis Alfred
Carter, W. (St. Pancras, S.W.)


Baker, John (Wolverhampton, Bilston)
Brockway, A. Fenner
Charleton. H. C.


Baldwin, Oliver (Dudley)
Bromley, J.
Chater, Daniel


Church, Major A. G.
Law, A. (Rosendale)
Riley, Ben (Dewsbury)


Cluse, W. S.
Lawrence, Susan
Ritson, J.


Cocks, Frederick Seymour
Lawrie, Hugh Hartley (Stalybridge)
Roberts, Rt. Hon. F. O. (W.Bromwich)


Compton, Joseph
Lawther, W. (Barnard Castle)
Romeril, H G.


Dagger, George
Leach, W.
Rosbotham, D. S. T.


Dallas, George
Lees, J.
Rowson, Guy


Denman, Hon. R. D.
Lindley, Fred W.
Salter, Dr. Alfred


Dickson, T.
Logan, David Gilbert
Sanders, W. S.


Dukes, C.
Longbottom, A. W.
Sandham, E.


Duncan, Charles
Longden, F.
Sawyer, G. F.


Ede, James Chuter
Lovat-Fraser, J. A.
Shaw, Rt. Hon. Thomas (Preston)


Edmunds, J. E.
Lunn, William
Shepherd, Arthur Lewis


Edwards, E. (Morpeth)
McElwee, A.
Sherwood, G. H.


Egan, W. H.
McEntee, V. L.
Shield, George William


Forgan, Dr. Robert
MacLaren, Andrew
Shiels, Dr. Drummond


Freeman, Peter
McShane, John James
Shillaker, J. F.


Gardner, B. W. (West Ham. Upton)
Marcus, M.
Shinwell, E.


Gardner, J. P. (Hammersmith, N.)
Markham, S. F.
Simmons, C. J.


Gill, T. H.
Marley, J.
Sinkinson, George


Glassey, A. E.
Marshall, Fred
Sitch, Charles H.


Gossling, A. G.
Mathers, George
Smith, Alfred (Sunderland)


Gould, F.
Matters, L. W.
Smith, Ben (Bermondsey, Rotherhithe)


Graham, D. M. (Lanark, Hamilton)
Messer, Fred
Smith, Frank (Nuneaton)


Graham, Rt. Hon. Wm. (Edin., Cent.)
Middleton, G.
Smith, H. B. Lees- (Keighley)


Grenfell, D. R. (Glamorgan)
Mills, J. E.
Smith, Rennie (Penistone)


Griffith, F. Kingsley (Middlesbro' W.)
Milner, Major J.
Smith, Tom (Pontefract)


Groves, Thomas E.
Montague, Frederick
Smith, W. R. (Norwich)


Hall, G. H. (Merthyr Tydvil)
Morgan, Dr. H. B.
Snowden, Thomas (Accrington)


Hall, Capt. W. P. (Portsmouth, C.)
Morley, Ralph
Sorensen, R.


Hamilton, Mary Agnes (Blackburn)
Mort, D. L.
Stamford, Thomas W.


Hammersley, S. S.
Moses, J. J. H.
Stephen, Campbell


Hardie, George D.
Mosley, Lady C. (Stoke-on-Trent)
Taylor, W. B. (Norfolk, S.W.)


Harris, Percy A.
Mosley, Sir Oswald (Smethwick)
Thurtle, Ernest


Hastings, Dr. Somerville
Murnin, Hugh
Tinker, John Joseph


Haycock, A. W.
Naylor, T. E.
Tout, W. J.


Hayes, John Henry
Newman, Sir R. H. S. D. L. (Exeter)
Trevelyan, Rt. Hon. Sir Charles


Henderson, Thomas (Glasgow)
Noel Baker, P. J.
Turner, B.


Henderson, W. W. (Middx., Enfield)
Oldfield, J. R.
Vaughan, D. J.


Herrlotts, J.
Oliver, P. M. (Man., Blackley)
Viant, S. P.


Hirst, W. (Bradford, South)
Owen, H. F. (Hereford)
Walkden, A. G.


Hoffman, P. C.
Palln John Henry
Wallace, H. W.


Horrabin, J. F.
Paling, Wilfrid
Wellock, Wilfred


Hudson, James H. (Huddersfield)
Parkinson, John Allen (Wigan)
Welsh, James C. (Coatbridge)


Isaacs, George
Perry, S. F.
Whiteley, Wilfrid (Birm., Ladywood)


Jones, Morgan (Caerphilly)
Pethick-Lawrence, F. W.
Wilkinson, Ellen C.


Jones, T. I. Mardy (Pontypridd)
Phillips, Dr. Marlon
Wilson, C. H. (Sheffield, Attercliffe)


Jowett, Rt. Hon. F. W.
Picton-Turbervill, Edith
Wilson, R. J. (Jarrow)


Kedward, R. M. (Kent, Ashford)
Pole, Major D. G.
Winterton, G. E.(Leicester, Loughb'gh)


Kelly, W. T.
Price, M. P.
Wright, W. (Rutherglen)


Kennedy, Thomas
Pybus, Percy John
Young, R. S. (Islington, North)


Kinley, J.
Quibell, D. F. K.



Lansbury, Rt. Hon. George
Rathbone, Eleanor
TELLERS FOR THE AYES.—


Lathan, G.
Raynes, W. R.
Mr. Charles Edwards and Mr.


Law, Albert (Bolton)
Richardson, R. (Houghton-le-Spring)
William Whiteley.


NOES.


Acland-Troyte, Lieut.-Colonel
Ganzoni, Sir John
Samuel, A. M. (Surrey, Farnham)


Albery, Irving James
Greene, W. P. Crawford
Samuel, Samuel (W'dsworth, Putney)


Atholl, Duchess of
Gretton, Colonel Rt. Hon. John
Smith, R. W. (Aberd'n & Kin'dlne,C.)


Boothby, R. J. G.
Hacking, Rt. Hon. Douglas H.
Smithers, Waldron


Bourne, Captain Robert Croft
Kindersley, Major G. M.
Southby, Commander A. R. J.


Brown, Brig.-Gen.H.C.(Berks, Newb'y)
King, Commodore Rt. Hon. Henry D.
Thomson, Sir F.


Carver, Major W. H.
Knox, Sir Alfred
Titchfield, Major the Marquess of


Churchill, Rt. Hon. Winston Spencer
Lane Fox, Col. Rt. Hon. George R.
Todd, Capt. A. J.


Colman, N. C. D.
Leighton, Major B. E. P.
Wallace, Capt. D. E. (Hornsey)


Colville, Major D. J.
Monsell, Eyres, Com. Rt. Hon. Sir B.
Williams, Charles (Devon, Torquay)


Courthope, Colonel Sir G. L.
Morrison, W. S. (Glos., Cirencester)
Wilson, G. H. A. (Cambridge U.)


Cranborne, Viscount
Power, Sir John Cecil
Windsor-Clive, Lieut.-Colonel George


Croom-Johnson, R. P.
Ramsay, T. B. Wilson
Womersley, W. J.


Dalkeith, Earl of
Ramsbotham, H.
Worthington-Evans, Rt. Hon. Sir L.


Dalrymple-White, Lt.-Col. Sir Godfrey
Reynolds, Col. Sir James



Dudgeon, Major C. R.
Roberts, Sir Samuel (Ecclesall)
TELLERS FOR THE NOES.—


Elliot, Major Walter E.
Ross, Major Ronald D.
Sir George Hennessy and Sir


Ferguson, Sir John
Ruggles-Brise, Lieut.-Colonel E. A.
Victor Warrender.

SECOND SCHEDULE.—(Special modifications to be made in Part II of this Act for the purposes of its application, to the Air Force Act.)

Lords Amendment: In page 8, leave out from the end of line 33 to the end of line 5, in page 9.

Motion made, and Question, "That this House doth disagree with the Lords in the said Amendment," put, and agreed to.—[Mr. T. Shaw.]

Ordered, That a Committee be appointed to draw up Reasons to be
assigned to the Lords for disagreeing to their Amendments to the Bill.

Committee nominated of Mr. Secretary Shaw, Mr. A. V. Alexander, Mr. Boothby, Mr. Ernest Brown, and Mr. Shinwell.

Three to be the quorum.—[Mr. T. Shaw.]

To withdraw immediately.

Reason for disagreeing to Lords Amendments, reported, and agreed to.

To be communicated to the Lords.—[Mr. T. Shaw.]

Orders of the Day — ELECTRICITY (SUPPLY) ACTS.

Motion made, and Question proposed,
That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1928, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, in respect of the rural district of King's Lynn and part of the rural district of Freebridge Lynn, in the county of Norfolk, and for the amendment of the King's Lynn Electric Lighting Order, 1896, which was presented on the 25th day of March, 1930, be approved."—[Mr. Parkinson.]

Mr. CHARLES WILLIAMS: Seeing that the House has power to criticise these Orders, the Minister of Transport ought to do his duty and attend the House in order to give the information which many of us desire. This Order affects one of the towns on the coast of Norfolk. The first provision refers to:
The King's Lynn Electric Lighting Order, 1896 (hereinafter called 'the principal Order') and this Order may be cited together as the King's Lynn Electricity Orders, 1896 and 1930.
I have used all my powers in the time at my disposal in endeavouring to find out precisely what is done under this Order, and I think it is essential that an explanation should be given before we pass the Order, because King's Lynn is by no means a mean town; it has an ancient and historic record. The next paragraph to which t would call attention says:
Provided also that Section 20 of the said schedule in its application to the undertaking within the said area shall have effect as if after the words 'electric signalling communication' wherever they occur there were inserted the words 'or electrical control of railways'.
I am not certain what that means. Does it mean electric signalling in connection with the railways in the area?
In Clause 6, there is reference to the "undertakers." I assume that those are the people who are working the scheme; a company or a local authority. I would like to know who are the undertakers. There are some of us who think that the undertakers may be the local authority and some think that they may be the proprietors of a sugar beet factory. Is this in some way mixed up, with the subsidy that is paid to sugar beet factories? Is the subsidy which Parliament gives being used in such a way that a particular locality gets cheap or easy electricity? A further point of which I would like some explanation arises in Clause 11 (3) which states:
If during the period of thirty days from the date when the notice is served upon the Undertakers they have failed to comply with such notice the Board of Trade may execute the works required to be done by the notice at the expense of the Undertakers.
It seems to me that in this particular case 30 days is not quite long enough, because this particular part of the country does not always move as fast as other parts of the country. What means have the Board of Trade for undertaking the work, if they consider it necessary to do so?
It is conceivable that they may undertake the work and do it so badly as to lay a needless burden on the local authority which deals with these matters. I am interested in the Fourth Schedule, which deals with the maximum price. If these are the usual provisions for regulating prices I will accept them, but if not I should like to know why there has been any alteration. I apologise for having to raise this matter at such an inconvenient time of the night.

Mr. PARKINSON (Lord of the Treasury): This Order is promoted by the Borough of King's Lynn and is in respect of the rural district of King's Lynn and part of the rural district of Freebridge Lynn in the County of Norfolk. It amends the King's Lynn Electric Lighting Order of 1896. The First Schedule indicates the area of the added area, and the Second Schedule the streets, not repairable by the local authority and railway, which may be broken up by the undertakers in pursuance of the special powers granted by the Order. The streets through which the undertakers are to lay down suitable and sufficient distributing mains for the pur-
poses of general supply are given in the Third Schedule, and this work has to be executed within a period of two years after the commencement of the Order. With regard to maximum prices, these are set out in the Fourth Schedule. No objection has been lodged to the confirmation of this Order by the Electricity Commissioners and in view of that fact I hope the House will approve. I apologise for the absence of the Minister of Transport, who is unable to be present.

Mr. ALBERY: I should like to ask one question on the Fourth Schedule. In the prospectuses which were sent out the maximum price is 8d., but in the Fourth Schedule no mention is made of a maximum price for electricity which is taken for purposes of power or heating, and unless there is some good reason it would be much better if such Bills as this included a maximum price for light and heating. It is in the interests of consumers that there should be some maximum rate in the Schedule.

Major ROSS: There is one point which occurs to me on which I should like to have further explanation. In the Fourth Schedule there is an added area of supply. The fact of this area being added gives the undertakers considerable powers over the district. In the Second Schedule it is said that:
Streets not repairable by the local authority may be broken up by the undertakers in pursuance of special powers given by this Order.
Those are country roads, and two of them are in the parish of Gaywood and two in the parish of South Wootton. The undertakers are the mayor, aldermen and burgesses of King's Lynn, and on that body of undertakers there does not appear to be any representatives of the area added under this Bill. We get in the first Schedule the parishes of Gay-wood and South Wootton, and the rural district of Freebridge. These are the areas affected by the second Schedule, and they are liable to serious inconvenience. They can have their roads broken up by the authority of King's Lynn itself. Suppose that they object to the actions of the undertakers, as well they may. What is their remedy? They cannot apply to the Courts of Law, because the matter is taken out of their hands by Sub-section (4) of Clause 9.
If a dispute arises between the county council and the undertakers it is stated "that the same shall be determined by an arbitrator to be appointed, on the application of either party, by the Minister of Transport." These two rural districts in their case against the undertakers are to be outside the law. They have merely the assistance of an arbitrator to be appointed by the Minister of Transport, although their local roads will be liable to be interrupted, and there is the confusion which must naturally ensue on the will of the King's Lynn authority. They have no representative on that authority, and if they have grievances the only possible procedure is by the county council, who may, or may not, take up their case. If they do not take up their case, they have no remedy. If they do take up their case, they cannot go to the Courts of Law. They must submit to some arbitrator. They do not know who will be the arbitrator who will be appointed by the Minister of Transport. These are reasons why we should have some further inquiry.

Mr. RAMSBOTHAM: I think this House should pay attention to this Order, and I wish to ask some questions of the Minister in charge. In Clause 5 it is stated that, subject to the provisions of this Order, the undertakers are empowered to break up streets and railways within the added area. The House would like to know how far this power of breaking up streets and railways will go. It appears to give the undertakers immense powers to cause almost a transformation of some parts of King's Lynn, to the detriment and inconvenience of the inhabitants. This scheme contemplates that some alteration will have to be made in the way of laying mains. Perhaps the hon. Gentleman in charge will let us know how far this scheme is going; what the area to be broken up amounts to; what the cost is likely to be; whether the undertakers are responsible for putting back everything in the position in which it was found; and whether the inhabitants will be compensated for the inconvenience to which they have been put. That point ought not to be overlooked, and I hope that the hon. Gentleman who is in charge, will inform the House as to how it is proposed to deal with the matter.

Commander SOUTHBY: May I draw attention to the fact that in paragraph 11 of the Order, it is provided that where any work constructed by the undertakers, under the powers of the Order, are:
situate wholly or partially on under or over the shore or bed of the sea or of any creek, bay, arm of the sea or navigable river
then if such works are allowed to fall into decay, the Board of Trade is allowed to step in and require the undertakers to repair the part of the works below high water mark of ordinary spring tides, or to remove the same and restore the site to its former condition. In this instance the owners of rights over the foreshore are concerned. Paragraph 9 provides the right to appoint an arbitrator in any dispute between the county council and the undertakers, and I wish to ask why there should be a different procedure in the other case, where it is a case of a dispute between the owners of public rights over the foreshore and the undertakers? Why should the right of having an arbitrator be taken away from the owners of these public rights, and why should they be forced to abide by the arbitrary decision of the Board of Trade? It seems to me that it is just as fair to have an arbitrator between the undertakers and the owners of public rights, as to have one in the case of a dispute between the county council and the undertakers.

Mr. PARKINSON: I do not think the House will expect an explanation of everything which is contained in this Order. [HON. MEMBERS: "Why not?"] The questions which have been asked are more or less concerned with the breaking up of roads and carrying cables and wires over bridges and that kind of thing. As there has been no opposition from the parties concerned, I take it for granted
that their rights are being protected, and on reference to paragraph 9 it will be seen that the county council are protected in respect of all county bridges. As to the point raised in reference to paragraph 11, that paragraph has been inserted in the interests of the Board of Trade to deal with the case of constructions by the undertakers which have been abandoned. I take it that all the objections indicated by hon. Members have already been covered.

Mr. ALBERY: What about the question of the maximum rate of charge for electricity?

Mr. PARKINSON: In paragraph 7 of the Order, there is provision with regard to fixing maximum prices in the area of supply, and in the Fourth Schedule to the Order the maximum rates are stated.
Question put, and agreed to.

Resolved,
That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, in respect of the rural district of King's Lynn and part of the rural district of Freebridge Lynn, in the county of Norfolk, and for the amendment of the King's Lynn Electric Lighting Order, 1896, which was presented on the 25th day of March. 1930, be approved.

The remaining Orders were, read, and postponed.

It being after half-past Eieven of the Clock, upon Wednesday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Twenty-nine Minutes before One o'clock.